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IN THE UNITED STATES DISTRICT COURT |
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| INDICTMENT The Grand Jury charges: COUNT ONE CONSPIRACY Introduction At all times relevant to this Indictment: 1. The Commodity Credit Corporation ("CCC") was an entity, owned and operated by the United States government, within the United States Department of Agriculture ("USDA"), a department or agency of the United States. 2. The CCC, through the Agricultural Stabilization and Conservation Service ("ASCS"), administered a crop subsidy program known as the Price Support and Production Adjustment Program. 3. The Program provided that if the market price for certain crops, including cotton and rice, fell below target prices by Congress, the government would pay up to $50,000 in subsidy payments per year, known as "deficiency payments," to participating qualified farm entities. 4. Each individual or entity that was part of a farm operation and was determined to be eligible for deficiency payments pursuant to the Program could have received up to $50,000 per year in such payments. It was to the financial advantage of a fanning operation to be able to claim that it included as many eligible persons or entities as possible. 5. Eligibility criteria for deficiency payments were set forth at 7 C.F.R. Part 1497, which is incorporated herein by reference. 7 C.F.R. Part 1497 regulated the number of persons or entities in a farming operation who were eligible for deficiency payments. Criteria used in 7 C.F.R. Part 1497 included but were not limited to the extent to which a person was "actively engaged in farming"; the contribution made by a person to the farming operation, through such things as capital contribution, active personal labor on the farm, and/or active management 2 of the farm; and whether a person had a separate and distinct interest in the land or crop involved and a separate responsibility for such interest. 6. Applicants for deficiency payments were required to submit a Farm Operating Plan-for-Payment Limitation Review ("Farm Operating Plan") to ASCS. In a Farm Operating Plan, a farm operation designated the participants in the farm operation and their claimed eligibility for deficiency payments. A Farm Operating Plan was initially submitted to the local county ASCS office. A county committee of local farmers made an initial determination as to eligibility and amount of deficiency payment. Appeal could then be taken to a state committee of farmers appointed by the United States Secretary of Agriculture. Despite its delegation of decision making responsibility as to deficiency payments to the aforementioned county and state committees, the USDA reserved the right to reverse or modify any determination made by a county or state committee. The Participants in the Conspiracy 7. From in or about 1987, the defendant, BROOK KEITH MITCHELL, SR. ("MITCHELL") and others, owned and operated a farming operation located in Greenville, Mississippi known as Five M Farming Enterprises ("FIVE W), also a defendant herein. FIVE M farmed cotton, soybeans, and rice on 4700 acres of leased land in the Mississippi delta area. 8. FIVE M was a partnership purportedly composed of six members, five of which were corporations, the sole shareholders of which, in various permutations, were members of MITCHELL's immediate family.The sixth partner was defendant MITCHELL The five corporations were:
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| B.K. Mitchell, Jr., Inc. | Brook K. Mitchell, Jr. | 100% | ||||||||||||
| Mitchell Planting Company, Inc. | Brook K. Mitchell, Jr. | 50% | ||||||||||||
| Unindicted Co-Conspirator # 1 | 50% | |||||||||||||
| North Fork, Inc. | Unindicted Co-Conspirator # 1 | 100% | ||||||||||||
9. The defendant, BROOK KEITH MITCHELL, JR. ("B.K. MITCHELL, JR.") was the eldest son of MITCHELL and a full-time college student attending first Delta State University, and then Memphis State University in Tennessee.
10. From in or about May 1993 through the date of this Indictment, MITCHELL was one of five members of the Mississippi ASCS State Committee and was appointed to that position by former Secretary of Agriculture Alphonso Michael Espy. The Mississippi State Committee decided, among other things, appeals as to program deficiency payments that were referred to it from the county level.
11. Unindicted co-conspirators not named herein, who are known to the grand jury, also participated in the conspiracy.
The Nature and Objects of the Conspiracy
12. From in or about March 1992 through on or about the date of this Indictment, in the District of Columbia and elsewhere, the defendants FIVE M, MITCHELL, and B.K. MITCHELL, JPL, as well as others known and unknown to the grand jury, did knowingly and willfully combine, conspire, confederate and agree together, to wit:
13. To make and cause to be made material false statements, knowing such statements to be false, for the purpose of influencing the action of the CCC and obtaining for themselves and others money, property and things of value, under Title 15, United States Code, Sections 714 to 714p, in violation of Title 15, United States Code, Section 714m(a) and;
14. With intent to defraud and deceive the ASCS and CCC and their officers, auditors and examiners, submit to the ASCS materially false and fraudulent entries in reports and statements, for the purpose of influencing the action of the ASCS and CCC and obtaining for themselves and others money, property and things of value under Title 15, United States Code, Sections 714 to 714p, in violation of Title 15, United States Code, Section 714m(b)(ii); and
15. With intent to defraud the ASCS and CCC participate and share in and receive directly and indirectly any money, profit, property and benefits under Title 15, United States Code, Sections 714 to 714p, through any transaction and any act of the CCC, in violation of Title 15, United States Code, Section 714m(b)(iii).
Overt Acts
16. In furtherance of this conspiracy, and to effect the objects of the conspiracy, defendants FIVE M, MITCHELL and B.K. MITCHELL, JR. and the Unindicted Co-conspirators committed and caused to commit in the District of Columbia and elsewhere, the following overt acts:
17. On or about April 2, 1992, the defendant MITCHELL, acting on behalf of FIVE M, filed a Farm Operating Plan for FIVE M in the ASCS office in Washington County, Mississippi, for the 1992 crop year. MITCHELL sought deficiency payments of at least $50,000 for each of the six partners composing FIVE M (i.e., the five corporations identified above as well as MITCHELL in his individual capacity), for total deficiency payments for the1992 crop year of at least $300,000.
18. On or about July 3, 1992, the defendant MITCHELL appealed the decision of the State Committee to deny deficiency payments for three of the six corporations comprising FIVE M to the National Appeals Division ("NAD") in Washington, D.C. The three corporations for which deficiency payments were denied were B.K. Mitchell, Jr., Inc.; Mitchell Planting Co., Inc.; and North Fork, Inc. The State Committee had concluded that the stockholders of those three corporations -- B.K. MITCHELL, JR. and the individual referenced herein as Unindicted Co-conspirator #1 -- were not critical to the profitability of the partnership's operation, and their management contributions also were insufficient to qualify for deficiency payments. The State Committee had noted that both B.K. MITCHELL, JR. and Unindicted Co-conspirator #1 were full-time students and that their contributions to the farming operation were inadequate to support a finding that they were actively engaged in farming for the 1992 crop year. In his 7 letter requesting appeal to the USDA from the State Committee's determination, MITCHELL falsely stated that all the partners comprising FIVE M were equal contributors to the farming operation.
19. On or about July 6, 1992, another unindicted co-conspirator (hereinafter "Unindicted Co-conspirator #2") wrote a letter to the NAD in Washington, D.C. stating that he would be representing FIVE M in the appeal.
20. On or about August 25, 1992, an evidentiary hearing on defendant MITCHELL's appeal was conducted before a hearing officer of the NAD. FIVE M was represented at the hearing by Unindicted Co-conspirator #2. Defendant MITCHELL and Unindicted Co-conspirator #2 presented documents and oral testimony at the hearing. Defendant MITCHELL and Unindicted Co-conspirator #2 falsely alleged at the hearing that all of the principals of the partners of FIVE M equally shared responsibility for FIVE M's farming operations.
21. In or about November 1992, Unindicted Co-conspirator #2 met with the Administrator of ASCS to request that the Administrator review MITCHELL's case. Unindicted Co-conspirator #2 requested this review because, on or about October 29, 1992, the Director of the NAD had rendered a decision in the FIVE M case denying FIVE M's appeal. The NAD had concluded that the entities B.K. Mitchell, Jr., Inc., Mitchell Planting Company, Inc. and North Fork, Inc. were not eligible to earn deficiency payments for the 1992 crop year. The NAD concluded that these three entities were not actively engaged in farming in 1992 because the contributions to the farming operation of B.K. MITCHELLI, JR. and Unindicted Co-conspirator #1 were insufficient for them to qualify for eligibility. The ASCS Administrator agreed to review the appeals.
22. In or about February 1993, Unindicted Co-conspirator #2, who had been appointed to a senior position within the Office of the Secretary by Secretary of Agriculture Alphonso Michael Espy approximately one month earlier, referred the FIVE M appeal to the new Acting Administrator of ASCS. Unindicted Co- conspirator #2 directed the new Acting Administrator to review the FIVE M appeal, among others. Unindicted Co-conspirator #2 did not disclose to the new Acting Administrator that he had represented FIVE M in the prior proceedings .
23. On or about March 3, 1993, acting pursuant to instructions from Unindicted Co-conspirator #2, the Acting Administrator suspended the review of the FIVE M appeal by the NAD and removed the case from the NAD to be handled directly by his office.
24. On or about May 26, 1993, another individual, Unindicted Co- conspirator #3, met with defendant MITCHELL to assist MITCHELL in rewriting and supplementing FIVE M's 1992 Farm Operating Plan so that it would be approved by ASCS. During this meeting, Unindicted Co-conspirator #3 met with MITCHELL, B.K.. MITCHELL,JR., and Undindicted Co-conspirator #1 to prepare for a telephone hearing with an official from the ASCS who had been delegated by the Acting Administrator of ASCS to reexamine the FIVE M appeal. At this meeting, Unindicted Co-conspirator #3. provided advice as to false answers that MITCHELL, B.K. MITCHELL, JR., and Unindicted Co-conspirator # 1 should provide to the ASCS official.
25. Also during the meeting on or about May 26, 1993, the defendants MITCHELL and B.K. MITCHELL, JR., together with Unindicted Co-conspirator #1, and in consultation with Unindicted Co-conspirator #3, prepared false, fictitious and fraudulent documents to substantiate their false statements in connection with the ASCS official's review of FIVE M's appeal.
26. The telephone conference with the ASCS official occurred on or about May 27, 1993. During that telephone conference, defendants MITCHELL, B.K. MITCHELL, JR. and Unindicted Co-conspirator #1 provided false and fraudulent information to the ASCS official in order to make it appear that all entities proffered by FIVE M were eligible for deficiency payments. The false information provided to the ASCS official during the telephone conference included but was not limited to the following:
27. On or about May 28, 1993, defendant MITCBELL caused to be sent to the ASCS via wire communication, ie, via facsimile: (i) false written summaries of the alleged duties of B.K. MITCBELL, JR. and Unindicted Co-conspirator # 1; and (ii) falsified and intentionally misleading computer printouts, invoices, contracts, and other records, for the purpose of corroborating the above-described false statements to the ASCS official.
28. As a result of the false statement, documents, and fraud set forth herein, on or about August 18, 1993, FIVE M was issued checks from the CCC for deficiency and other payments totalling $179,520.
29. As a direct consequence of the false statements, documents and fraud set forth herein, no further inquiry or challenge was made by the ASCS in succeeding crop years with respect to the eligibility of each partner of FIVE M for deficiency payments. Had the defendants' scheme and artifice been known at the time it was perpetrated, FIVE M's eligibility for any deficiency payments would have been immediately terminated. The total of the deficiency payments that FIVE M received as a direct result of the scheme and artifice to defraud alleged herein, for the crop years 1992 through 1995, was $776,860.
(Title 15, United States Code, Section 714m(d))
COUNT TWO
FALSE STATEMIENTS
30. On or about May 27, 1993, in the District of Columbia and elsewhere, the defendants FIVE M, MITCHELL and B.K. MITCHELL, JR., in a matter within the jurisdiction of the USDA, did knowingly and willfully make and cause to be made material false statements, knowing such statements to be false, as delineated at Paragraph 26 of this Indictment, for the purpose of influencing the action of the CCC and obtaining for themselves and others money, property, and things of value, under Sections 714 to 714p, Title 15, United States Code.
(Title 15, United States Code, Sections 714m(a) and Title 18, United States Code, Section 2)
COUNT THREE
FALSE STATEMENTS
31. On or about May 28, 1993, in the District of Columbia and elsewhere, the defendants FIVE M, MITCHELL and B.K. MITCHELL, JR., in a matter within the jurisdiction of the USDA, did knowingly and willfully make false statements, to wit, submitted materially false documents to the ASCS, knowing such statements to be false, as delineated at Paragraph 27 of this Indictment, for the purpose of influencing the action of the CCC and obtaining for themselves and others money, property, and things of value, under Sections 714 to 714p, Title 15, United States Code.
(Title 15, United States Code, Sections 714m(a) and
Title 18, United States Code, Section 2)
COUNT FOUR
FALSE ENTRIES
32. On or about May 28, 1993, in the District of Columbia and elsewhere, the defendants FIVE M, MITCHELL and B.K. MITCHELL, JR., being connected with a CCC program, did with intent to defraud and deceive the ASCS and CCC and their officers, auditors and examiners, submit to the ASCS materially false and fraudulent entries in reports and statements, as delineated at Paragraph 27 of this Indictment, for the purpose of influencing the action of the ASCS and the CCC and obtaining for themselves and others money, property, and things of value, under Sections 714 to 714p, Title- 15, United States Code.
(Title 15, United States Code, Sections 714m(b)(ii) and
Title 18, United States Code, Section 2)
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