GREENEVILLE — One of three Northeast Tennessee residents involved in a scheme to submit more than $178,500 in false crop insurance claims will not be going to federal prison but will face hefty restitution, a judge ordered last week.
Glenn Martin Jr., of Limestone, his ex-wife Janet Garland, of Unicoi, and her brother Joseph Matchett, of Washington County, were indicted in U.S. District Court in Greeneville in November 2012. The three-count indictment charges them with conspiracy and submitting false crop insurance claims. Martin also faces a charge of concealing assets during bankruptcy.
All three agreed to plead guilty to the conspiracy charge. Martin has also agreed to plead guilty to the concealing assets charge.
During a sentencing hearing last week, U.S. District Judge Ronnie Greer sentenced Matchett to four years probation and ordered him to pay $178,515 in restitution. Garland is scheduled to be sentenced on Sept. 18, Martin on Dec 11.
The maximum sentence for the conspiracy charge is five years in prison and a $250,000 fine.
However, given his past criminal history and “substantial assistance” in the Martin/Garland cases, Matchett faced 12 to 18 months in prison. Prosecutors agreed to a reduced sentence in the matter, recommending a 12 month prison sentence.
“(Matchett’s) role in the scheme was limited and there is no evidence he pro-actively sought to join this scheme, prepared any of the documents or did anything other than react as directed by Martin and Garland,” Assistant U.S. Attorney Helen Smith wrote in a sentencing memorandum.
Greeneville attorney David Leonard, who represented Matchett, wrote in a sentencing memorandum that probation would serve the interests of justice in this case.
“The ... criminal proceedings have been a wake-up call,” Leonard wrote of his client.
According to court records, Martin arranged for Garland and Matchett to become tobacco producers in 2009 and agreed to finance all of the farm’s expenses, including obtaining crop loss insurance through the Rural Community Insurance Service. Crop loss insurance is provided for under federal law and is meant to cover crop losses due to drought, flood or other natural disaster.
From March 2009 through April 2010, the three defendants made false statements and reports to the RCIS for losses that were not eligible for crop insurance.
Under the direction of Martin and Garland, Matchett applied for and received crop loss insurance on 73 acres of land in Washington County, falsely claiming he was the tobacco farmer on the property.
Matchett then submitted a report with the RCIS claiming he had planted tobacco at the Tipton, Clinic, Gary Stout and Mitchell farms, when he had not. In October 2009, Matchett filed paperwork claiming the crop was destroyed by severe weather.
In April 2010, the RCIS approved the claim and paid Matchett slightly more than $178,500. Over the course of a month, Martin and Garland paid Matchett $15,000 for his role in the scheme, in three increments of $5,000 each.
Since 1999, Martin has owed the United States more than $20 million in civil federal tobacco penalties. That judgment is a result of Martin concealing ownership of and participation in tobacco production in an attempt to evade federal income taxes.
To avoid payment of that debt and to continue earning income from farming, prosecutors say Martin arranged for his businesses to be operated in the names of other people, specifically Matchett.
Martin attempted to have the tobacco penalties removed by filing for bankruptcy in 1999, but in 2001 the bankruptcy court ruled the penalties were exempt. In 2008, the United States seized Martin’s assets in order to collect on the debt, but Martin filed for bankruptcy again in an attempt to stop the proceedings. During the bankruptcy proceedings, prosecutors say Martin fraudulently collected $700,000.
Court records state Martin was deposed in an adversary proceeding in his bankruptcy case and falsely denied the scheme to defraud the U.S. government with the false crop loss insurance.