CEDAR RAPIDS, IA – A Mason City man was sentenced Monday to federal prison after a guilty plea in federal court.
On Tuesday in Cedar Rapids, Raymond Schaefer, 41, was sentenced to 24 months in prison, and ordered to pay $157,587 to MidWestOne Bank, and $213,216 to Farm Service Agency. Schaefer pleaded guilty on March 1 to farm fraud.
According to the guilty plea, Schaefer admits to receiving a $435,000 FSA guaranteed line of credit through MidWestOne Bank. The note specified that FSA would guarantee 90% of the farm operating line of credit for crop years 2006 through 2010. The terms of the loan required that the principle be paid down to $100 each year before money for the next crop year would be advanced, and Schaefer agreed to provide financial statements to support this agreement.
In late 2007, the bank learned that Schaefer was behind on his payments to other creditors, and in 2008 had misrepresented the value and existence of his assets. One example of this is his filing that he had 68,000 bushels of corn and 4,000 bushels of soybeans, when he actually had none.
Prosecutors say Schaefer used the money received through the line of credit to fund his gambling, by depositing the funds into his used car business’ checking account and withdrawing it from there. Eventually, the car lot’s bank account and his MidWestOne account were depleted to fund Schaefer’s gambling, according to the plea.