Former Kentucky tobacco warehouse manager allegedly helped farmers cheat on insurance
The former manager of a Kentucky tobacco warehouse provided paperwork that helped farmers commit fraud against the federal crop insurance program, a federal grand jury charged.
The grand jury in Lexington indicted Thomas H. Kirkpatrick on Thursday on charges of conspiracy to commit fraud involving crop insurance one charge of conspiracy to commit money laundering.
According to the indictment, Kirkpatrick was manager at Farmers Tobacco Warehouse in Danville at the time of the alleged offenses.
The warehouse has since closed.
Kirkpatrick provided checks to farmers that showed they had bought burley tobacco from the warehouse, which the farmers then used in insurance claims that their crops were short so they’d had to buy the leaf in order to fulfill their production contracts.
Kirkpatrick deposited the checks into the warehouse account, allowing farmers to give the canceled checks to their insurance providers, but then reimbursed the farmers for the checks, minus a fee for Kirkpatrick, the indictment alleges.
In one example cited in the indictment, Kirkpatrick allegedly received five checks totaling $763,434 from a farmer named Larry Walden in February 2020, as evidence that Walden had bought 479,704 pounds of tobacco from the warehouse.
The checks were an effort “to conceal Walden’s production from his insurance claim of loss,” the indictment alleges.
There was no public record of federal criminal charges against Walden as of Friday afternoon.
In another example, Kirkpatrick received a check for $120,032 from a farmer named David Hunt to show Hunt had bought tobacco from the warehouse, which was meant to conceal Hunt’s tobacco production, according to the indictment.
Hunt, of Taylor County, pleaded guilty Friday afternoon in federal court in Lexington to a charge that he conspired to commit money laundering.
The charging document said Hunt wrote checks to Farmers Tobacco Warehouse for tobacco, used the canceled checks as evidence that his tobacco production was short, and “corruptly influenced” his insurance company to make payments.
The warehouse paid him back, according to the charge.
Hunt also admitted he took out crop insurance in his son’s name in order to qualify for bigger payouts; wrote a check to another farmer to make it appear he’d had to buy tobacco; and sold tobacco under other people’s names to hide his production.
Hunt agreed to a financial judgment of $5.4 million.
The indictment against Kirkpatrick also charges that the farmers who took part in the scheme included Christopher T. Wilson and David Wisdom, both of whom owned and rented farm land in Barren and Metcalfe counties.
Both have pleaded guilty and are scheduled to be sentenced later this year.
Wisdom agreed to repay at least $1.9 million to the federal crop-insurance program, while Wilson agreed to restitution of at least $669,447.
The indictment against Kirkpatrick also alleges that he conspired with farmers to provide them with fake contracts indicating the warehouse would buy large amounts of organic tobacco from them.
The farmers then used the fake contracts to get crop insurance, which often resulted in a “near doubling” of their loss claims, the indictment says.
Hunt was one of those farmers. He acknowledged in his plea agreement that when he took out a policy covering a crop of organic tobacco, he knew there was no market for it.
The money laundering charge against Kirkpatrick has a maximum sentence of 20 years in prison.
Federal authorities have pursued an investigation of fraud involving crop insurance in Kentucky the last few years that has resulted in more than two dozen convictions, including farmers, warehouse employees and an insurance adjuster.
Michael McNew, who was once an insurance agent and adjuster in Mount Sterling, received one of the longest sentences, at seven years and two months in prison. He also was ordered to pay $10.5 million in restitution.
A prosecutor said in a court document that McNew had been at the center of a “network of corruption.”
This story was originally published March 14, 2025 at 3:18 PM.
