Former Kentucky Warehouse Manager Agrees to Pay $16M in Crop Insurance Fraud Case

A former manager of a now-defunct tobacco warehouse in Danville, Kentucky, has agreed to pay at least $16 million in restitution after pleading guilty to federal charges linked to a large-scale crop insurance fraud scheme. Thomas H. Kirkpatrick, who managed the Farmers Tobacco Warehouse from 2016 to 2020, entered a guilty plea to conspiracy to commit money laundering. The plea deal dropped multiple other fraud-related charges initially filed against him.

Court records show Kirkpatrick helped farmers submit fraudulent crop insurance claims by issuing checks for non-existent tobacco purchases. These checks falsely indicated that farmers had bought burley tobacco from the warehouse, which they used to justify crop losses on insurance claims. In return, Kirkpatrick received a fee for each transaction and reimbursed the farmers for the amounts shown on the fake checks.

One example from 2020 revealed that a farmer, Larry Walden, submitted checks totaling over $763,000 to claim the purchase of nearly 480,000 pounds of tobacco that he never actually bought. Walden also pleaded guilty to conspiracy to commit money laundering and was ordered to repay $9.9 million. He faces up to 20 years in prison, the same maximum sentence Kirkpatrick could receive.

Neither man has been sentenced yet. However, the substantial financial penalties highlight the ongoing federal efforts to crack down on fraud within the U.S. crop insurance program—a system designed to protect farmers but susceptible to exploitation when oversight is weak.