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March 8, 1999



Donald C. Smaltz, Independent Counsel In re Espy, announced:

Judge Thomas Penfield Jackson today sentenced Brook Keith Mitchell, Sr. and his 4700-acre Mississippi-based farming company, Five M Farming Enterprises, to pay full restitution in the amount of $776,860 to the USDA, and each to three years of probation, for their conviction on charges of conspiring to defraud and making false statements to the United States Department of Agriculture (USDA). Mitchell and Five M Farming Enterprises plead guilty in November of 1996 to the four-count indictment that charged them with illegally obtaining excess crop subsidy payments from 1992 through 1995. This particular type of fraud is sometimes referred to as the "Mississippi Christmas Tree."

Under the USDA's Price Support and Production Adjustment Program, owners of farming operations are entitled to crop subsidy payments of up to $50,000 per owner under certain market conditions. Mitchell had developed a scheme that falsely claimed there were three companies, owned separately by his sons, and that these three companies were partial owners of Five M, thereby illegally inflating the entire operation's eligibility for subsidies.

At one point in 1992, the USDA concluded that the three companies claimed by Mitchell did not qualify for subsidy payments. Mitchell, a long-time supporter of former Secretary of Agriculture Alphonso Michael Espy, and whom Espy appointed in 1993 to a Mississippi USDA position, received special assistance from Espy's then Chief of Staff, Ronald H. Blackley, in the form of a review of that decision. Following additional false statements by Mitchell, the decision denying subsidies was reversed, enabling Mitchell to continue to obtain unlawful subsidies through 1995.

Mitchell's crimes came to the attention of the Office of Independent Counsel during the course of its investigation of former Secretary of Agriculture Espy. Following his guilty plea, Mitchell cooperated in this office's investigation.

The prosecution of Mitchell and Five M Farming Enterprises was handled by Associate Independent Counsel Joseph P. Guichet and Senior Trial Counsel Barry Coburn.

Independent Counsel Smaltz expressly acknowledged and expressed appreciation for the support and assistance of USDA Inspector General Agents and other USDA offices for their efforts in this investigation and prosecution.

NOTE: Copies of the criminal information are available from the Office of Independent Counsel.


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