U.S. Department of Labor OIG, Iowa Custom Cattle Farmer Pleads Guilty to Livestock Theft and COVID-19 Fraud (USAO ND-IA 12/05/2023) (2023-12-13)

Summary

A press release from the U.S. Attorney's Office for the Northern District of Iowa, dated Tuesday, December 5, 2023, announcing that Michael Wayne Butikofer, age 53, of Monona, Iowa, who operated a custom cattle operation known as "Fawn Hollow," pled guilty on December 1, 2023 to one count of theft of livestock, one count of wire fraud and one count of false bankruptcy declaration, in case 22-CR-1018. In the plea agreement, Butikofer admitted converting proceeds of cattle owned by six cattle investors and defrauding the USDA of more than $200,000 in Coronavirus Food Assistance Program funds through applications in the name of Individual-1. The release states that Butikofer received over $1.5 million in an EIDL in February 2022 and used no less than $75,000 of it to pay a bankruptcy attorney. Butikofer faces up to 30 years' imprisonment.

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PRESS RELEASE



Iowa Custom Cattle Farmer Pleads
Guilty to Livestock Theft and
COVID-19 Fraud
Tuesday, December 5, 2023


For Immediate Release
U.S. Attorney's Office, Northern District of Iowa

Also Convicted of False Statements in Bankruptcy

An Iowa farmer who operated an unlicensed custom cattle operation known as “Fawn
Hollow” in Clayton County pled guilty on December 1, 2023, in federal court in Cedar
Rapids. Michael Wayne Butikofer, age 53, from Monona, Iowa, was convicted of one
count of theft of livestock, one count of wire fraud, and one count of false bankruptcy
declaration.

In his plea agreement, Butikofer admitted he operated a large farming operation in
Northeastern Iowa known as “Fawn Hollow,” from his home farm outside St. Olaf, Iowa,
and at satellite locations elsewhere in Iowa and Wisconsin. Butikofer operated a so-
called “custom cattle” feeding operation in which employees of his organization would
raise and care for cattle owned by other individuals, including cattle investors located
across the United States. Fawn Hollow then sold the cattle, primarily to a Wisconsin
slaughterhouse.

At no time was Butikofer or “Fawn Hollow” registered with the United States
Department of Agriculture (“USDA”) as a “dealer” under the Packers and Stockyards Act
of 1921 (“the Act”). Butikofer and another individual identified as “Individual-1” did
participate in the so-called “H-2A” visa program and recruited agricultural workers from
the Republic of South Africa to work at Fawn Hollow.

Between July 2020 and February 2022, Butikofer converted the proceeds of sales of
cattle owned by six cattle investors to his own use. Butikofer had convinced the cattle
investors to allow Butikofer to sell the cattle in his own name. When Butikofer sold the
cattle to the Wisconsin slaughterhouse, Butikofer falsely represented to the
slaughterhouse that he had “good and merchantable title to” the cattle when he did not,
in fact, own or otherwise have title to the cattle. By convincing the cattle investors to
permit Butikofer to sell their cattle in his own name, and by fraudulently concealing the
true ownership of the cattle from the slaughterhouse, Butikofer attempted to evade the
requirements of the Act and its regulations for registration, posting of a dealer bond,
and prompt payment, which would have protected the cattle investors’ funds.

Between July 2020 and August 2020, Butikofer defrauded the USDA of more than
$200,000 in emergency assistance funds designed to assist livestock producers during
the COVID-19 pandemic. Specifically, applications were submitted in the name of
Individual-1 and entitled “Coronavirus Food Assistance Program” (“CFAP”) payments. A
cattle producer qualified for CFAP payments on a per head basis based on the
producer’s owned inventory of eligible beef cattle on a date selected by the producer
between certain dates in calendar year 2020. It was part of Butikofer’s wire fraud
scheme that the CFAP applications in Individual-1’s name falsely stated that Individual-1
owned cattle when, in truth, Individual-1 did not own any cattle. Finally, it was part of
the scheme that Butikofer would intercept or otherwise gain access to the CFAP funds
once the USDA provided those funds to Individual-1 and then use those CFAP funds for
his own purposes.

In February 2022, Butikofer received over $1.5 million from the Small Business
Administration (“SBA”) as part of an application for an Economic Injury Disaster Loan
(“EIDL”). Butikofer falsely stated to the SBA that he would use the proceeds “solely as
working capital to alleviate economic injury caused by” the COVID-19 pandemic. In
truth, upon receiving the $1.5 million from the SBA, Butikofer used no less than $75,000
of the EIDL funds to pay an attorney known as Attorney-1 for services rendered in
connection with a Chapter 11 bankruptcy proceeding that Butikofer filed on or about
February 28, 2022, in In re Michael W. Butikofer et al., Case Number 22-00096, in the
United States Bankruptcy Court for the Northern District of Iowa.

In March 2022, Butikofer submitted a false and fraudulent statement of financial affairs
in his bankruptcy case. In April 2022, Butikofer falsely testified under oath at a meeting
of creditors and, in November 2022, repeatedly committed perjury before the
bankruptcy court when asked questions about the ownership of his cattle operation.

From April 2023 to November 2023, while on federal pretrial release, Butikofer recruited
and caused Individual-1 to recruit H-2A workers to the United States under false and
fraudulent pretenses, representations, and promises. The false and fraudulent
pretenses, representations, and promises included: (1) the housing conditions provided
to the employees; (2) the location of the employees’ work; (3) the terms and timing of
reimbursement for the employees’ work and expenses; and (4) payment for injuries
sustained during the employment.

Evidence at a detention hearing held on December 1, 2023, and December 4, 2023,
showed that Butikofer attempted to tamper with grand jury and trial witnesses. In 2020,
a federal district court entered a default judgment against Butikofer and in favor of H2A
workers from the Republic of South Africa for civil violations of the Fair Labor Standards
Act and Trafficking Victims Protective Reauthorization Act in 2018. As part of his plea
agreement, Butikofer has agreed to voluntarily terminate and cease participation in
foreign labor programs with respect to any program administered by the U.S.
Department of Labor or U.S. Department of Homeland Security.

Sentencing before United States District Court Judge C.J. Williams will be set after a
presentence report is prepared. Butikofer faces a possible maximum sentence of 30
years’ imprisonment, a $750,000 fine, and 3 years of supervised release following any
imprisonment.

The case is being prosecuted by Assistant United States Attorney Timothy L. Vavricek
and was investigated by the Small Business Administration, Office of Inspector General,
the Federal Deposit Insurance Corporation, Office of Inspector General, the United
States Department of Agriculture, Office of Inspector General, the United States
Department of Labor, Office of Inspector General, and Homeland Security
Investigations.

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.

The case file number is 22-CR-1018.

Follow us on Twitter @USAO_NDIA.

Updated December 5, 2023

Topics
CORONAVIRUS

BANKRUPTCY

FINANCIAL FRAUD
Component
USAO - Iowa, Northern


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