Grand Island Man Sentenced in $192,000 Farm Loan Fraud

LINCOLN, Neb. (KLKN) — A Nebraska farmer was sentenced Wednesday for defrauding the federal government of nearly $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 resident also must repay $192,758.61 to the Farm Service Agency, part of the U.S. Department of Agriculture.

Between 2016 and 2018, Butt lied about owning livestock to obtain two loans from the agency, according to the U.S. Attorney's Office.

He also agreed to use the money for agricultural expenses.

But when Butt later filed for bankruptcy, he claimed he never owned any cattle, authorities said.

This raised eyebrows, so investigators began investigating Butt.

They discovered he used the loan money to pay for his car, make ATM withdrawals and make other personal expenses, authorities said.

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

The U.S. attorney's office said he sold cereal using his family members' names to avoid paying taxes to the government.

But he then lied about it under oath in bankruptcy court.

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