CEDAR RAPIDS | A Clear Lake farmer has been sentenced to federal prison and ordered to pay restitution after pleading guilty in a multi-million dollar cut-and-paste loan scam.
Michael Royster, 53, pleaded guilty to providing false documents to Farm Credit Services of America (FCSA) to receive $3.8 million in credits for 2015 farming expenses.
U.S. District Court Judge Linda R. Reade sentenced Royster to 33 months in prison and ordered him to pay $1,133,821.31 in restitution to FCSA.
Royster admitted in a plea agreement he created fake contracts to mislead FCSA into thinking local cooperatives or other purchasers were storing more of his and his son's corn and soybeans than what they actually had in storage, court documents said.
He created the fake documents by cutting and pasting additional digits on the actual contracts and then making photocopies of the altered documents, according to court documents.
In one example, Royster admitted to falsifying a contract showing a cooperative had approximately 20,000 bushels of his corn by adding a "1" to make it appear as though the cooperative instead held 120,000 bushels, court documents said. He admitted to using a similar scam to get loans in 2011, 2012 and 2013.
Royster must also serve a term of supervised release after the prison term. A special assessment of $100 was imposed.
The case was prosecuted by Assistant U.S. Attorney Jacob A. Schunk and investigated by the FBI.