Bond revoked in crop insurance fraud case

Farm Forum

A prominent Brown County landowner had his bond revoked by a federal judge Monday for failing a drug test and not notifying court officials about moving to Florida for several months.

Nickolas J. Berbos, 53, previously pleaded guilty of offering extra employment benefits to a worker in exchange for false testimony in a 2013 investigation. He asked the employee to testify that an air seeder did not run during the time period covering some disputed crop applications.

Berbos’ bond conditions included that he not use drugs and that he inform court officials of any address change. But after Judge Charles Kornmann ordered him arrested the night of July 8 at the Aberdeen airport, Berbos tested positive for marijuana and amphetamine.

His attorneys argued that a prescribed medication triggered the positive amphetamine test, though Kornmann said he was suspicious of that claim. In documents filed with the court, the judge said, Berbos did not disclose that he was on any prescription medications. Defense attorneys, though, said a physician did write a prescription for the drug and that Berbos has been taking it while in jail awaiting the hearing.

Wendell Hoskins II, one of Berbos’ defense attorneys, said that Kornmann and the U.S. probation office should have been notified that Berbos was going to spend an extended time in Florida. But, Hoskins said, there was an assumption that court officials knew of Berbos’ Florida address and there was no intent at deception.

Missed court date

“It doesn’t have to be a permanent change of address,” said Kornmann, pointing out that it was unacceptable that Berbos didn’t return to Aberdeen before a court hearing scheduled for July 8. The missed court date is why Berbos was arrested.

Rasmussen, who took responsibility for the miscommunication, said he told Berbos that he didn’t need to rush home because he didn’t think the hearing would be set so quickly.

But, Kornmann said, Berbos knew he was facing a bond revocation and should have gotten home. Regardless of what his attorneys told him, Berbos had five days’ notice and should have bought a plane ticket immediately or found some other way to get back to Aberdeen.

Interestingly, the reasons Kornmann revoked Berbos’ bond had nothing to do with the U.S. attorney’s office’s original motion. It claims that Berbos threatened or intimidated at least one witness by telling a farmer he would not be able to rent Berbos’ land unless the farmer switched to Berbos’ crop insurance agent.

Kornmann said he found the timing of Berbos’ messages to the farmer suspicious, but stopped short of saying his actions were improper.

While Thomas Wright, assistant U.S. attorney for South Dakota, characterized Berbos’ communications as a “shakedown,” Hoskins countered that Berbos was just looking out for his business operation. That type of intimidation is against the terms of Berbos’ bond, according to Wright.

As details of those interactions were shared in court, it became clear charges of filing false crop insurance claims against Berbos are expected to be dismissed, under the terms of a plea agreement, when he’s sentenced in September. Kornmann, though, noted he has yet to accept the plea agreement.

Jonathan Ristau is a crop insurance agent in Brown County and a witness in the case, according to testimony and court documents. Hoskins said that Ristau has taken responsibility for entering erroneous information on a crop insurance form that indicated 74.3 acres of Berbos’ land were prevented planting acres. Prevented planting provisions in the federal crop insurance program allow for payments when extreme weather conditions prevent crops from being planted. That misinformation played a role in fraudulent crop insurance charges being filed against Berbos in August 2013.

Apparently, Kornmann said, near the closing of Monday’s hearing that ran more than two hours, the U.S. attorney’s office is unsure there is enough evidence to proceed with those charges.

Payments on hold

Because of the prevented plant problem, the Berbos family is still awaiting $2 million in crop insurance payments from the USDA from three years ago, Hoskins said.

Kornmann said he would be willing to consider releasing Berbos before sentencing, but that he wants people to understand what when somebody’s out of jail on bond and doesn’t follow the rules, there will be repercussions.

“I want to send a message that if you’re on federal supervision, you’re going to dot every ‘I’ and cross every ‘T.’ And Mr. Berbos clearly has not done that,” Kornmann said. “It’s a cavalier attitude …”

Wright said the U.S. attorney’s office was going to recommend that Berbos be sentenced to probation, but that a more severe punishment might now be contemplated.

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