Appeals court upholds conviction in North Dakota spud scam

Farm Forum

FARGO, N.D. (AP) — The conviction and sentence of a North Dakota farmer accused of intentionally destroying potatoes to collect federal farm insurance payments was proper, according to an 8th U.S. Circuit Court of Appeals opinion released on May 4.

Aaron Johnson, formerly of the Cooperstown area, was convicted in December 2014 of conspiring to receive illegal payments and making false statements and later sentenced to serve four years in prison. A judge said the loss to the government from one growing season was more than $900,000.

Johnson argued in his appeal that the government’s key witness, a former farmhand, was not credible because of his criminal history. A three-judge panel of the 8th Circuit rejected the notion and said there was sufficient evidence to support the outcome.

“Federal programs like the federal farm programs are based on an honor system,” U.S Attorney Chris Myers said in a statement on May 4. “Unfortunately, there are a few who take advantage of this system and some, like Aaron Johnson, who brag about defrauding the system.”

Neil Fulton, head of the federal public defender’s office for North Dakota and South Dakota, had no comment. “We are reviewing the decision and will discuss any possible next steps with our client,” Fulton said.

Aaron Johnson’s brother, Derek, also was convicted in the case and sentence to 1½ years in prison. Derek Johnson was not part of the appeal.

Authorities say the Johnsons applied chemicals, including a substance designed for dissolving solid materials in septic systems, and added spoiled and frozen potatoes to their stored crop in order to speed up deterioration. Portable heaters allegedly were used to heat the warehouse above 80 degrees and make the potatoes rot faster. Once the potatoes were spoiled, the men reported the loss to their insurance company and said the crop was lost due to naturally caused diseases.

Aaron Johnson said in his appeal that former employee Leo Borgen, who was a paid informant for the government, could not be trusted because he had a long criminal history and that prosecutors dropped charges against him in exchange for his testimony. Borgen also admitted that he had double-crossed investigators by revealing to Johnson that he was a government informant.

The 8th Circuit panel said credibility assessments are virtually unreviewable on appeal.