Charles City farmer convicted in USDA loan scheme

A Charles City area farmer pleaded guilty Monday to selling over 90,000 bushels of corn that was pledged as collateral on federal Farm Service Agency loans for over $196,000.

Leroy Jones, 59, pleaded guilty in U.S. District Court to one count of conversion of property pledged to Farm Service Agency, which is under the U.S. Department of Agriculture. Jones admitted during the hearing to removing or converting 90,581 bushels of corn that he used to mortgage a loan for $196,327.

Jones also admitted to selling the corn for $332,804 with the intent to defraud the loan agency from Dec. 1, 2014 through Sept. 30, 2015.

Court documents show on Oct. 7, 2015, the Osage Coop Elevator in Osage, contacted the loan agency and 'indicated” that Jones was selling corn to the elevator. The agency then obtained documents showing Jones had been selling to the elevator since September 2014. When a spot check of the grain bins was conducted of the pledged corn, the agency found them empty, pleading documents show. Jones admitted to a USDA investigator that he owed some money when questioned about the missing corn and outstanding loans, according to court documents. Jones said he would discuss it with the loan agency but he never did.

U.S. Chief Magistrate Jon Scoles told Jones faces up to five years in federal prison and a fine twice the gross gain of the crime or twice the loss to the agency, or $250,000, whichever is greater. He also will be ordered to pay $196,327 in victim restitution. Jones remains on release pending sentencing.