Grand Island man sentenced for $192,000 farm loan fraud

LINCOLN, Neb. (KLKN) — A Nebraska farmer was sentenced Wednesday for defrauding the federal government of almost $200,000.

U.S. District Court Judge John Gerrard ordered Daniel Butt, 39, to spend five years on probation for bankruptcy fraud and making a false statement on a loan application.

The Grand Island man must also repay $192,758.61 to the Farm Service Agency, which is part of the U.S. Department of Agriculture.

From 2016 to 2018, Butt lied about owning cattle to obtain two loans from the agency, according to the U.S. Attorney’s Office.

He also agreed to use the money for farming expenses.

But when Butt later went through bankruptcy proceedings, he said he never owned cattle, authorities said.

That raised eyebrows, so investigators started looking into Butt.

They discovered that he had been using the loan money for car payments, ATM withdrawals and other personal expenses, according to authorities.

Meanwhile, Butt was writing bad checks to the Farm Service Agency and withholding money he had made from farming, in violation the loan terms.

The U.S. Attorney’s Office said he sold grain using family members’ names to avoid paying the revenue to the government.

But then lied about that under oath in bankruptcy court.

In addition to the probation, Butt will spend eight weekends in jail.