Clayton County farmer sentenced to 15 years for $5 million cattle theft, wire fraud

A Clayton County farmer who stole more than $5 million in livestock and millions worth of pandemic aid was sentenced last week in federal court to over 15 years in prison.

Michael Wayne Butikofer, 54, of Monona, pleaded guilty last December to one count each of theft of livestock, wire fraud and false bankruptcy declaration.

Evidence in the case established Butikofer operated a large farming operation in Northeast Iowa known as “Fawn Hollow,” according to court documents. He operated a “custom cattle” feeding operation in which his employees raised and cared for cattle owned by other individuals, including cattle investors across the United States. Fawn Hollow then sold the cattle, primarily to a Wisconsin slaughterhouse.

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Butikofer or Fawn Hollow were not registered with the U.S. Department of Agriculture as a “dealer” under the Packers and Stockyards Act of 1921. Butikofer participated in the “H-2A” visa program to hire foreign nationals as temporary agriculture workers — and recruited workers from South Africa for Fawn Hollow.

The criminal case followed a 2020 civil judgment that required Butikofer to pay three South African workers nearly $250,000 based on allegations he verbally and physically abused them — including by allegedly pushing one man toward a grain auger and threatening to throw him in — did not provide them promised wages and did not fully reimburse them for their travel costs to Iowa.

Between July 2020 and February 2022, Butikofer converted the proceeds of sales of cattle owned by eight investors, totaling over $2.5 million, to his own use, according to the U.S. Attorney’s Office for the Northern District of Iowa. Butikofer had persuaded the cattle investors to allow him to sell the cattle under his own name.

When Butikofer sold the cattle to the Wisconsin slaughterhouse, he falsely represented to the slaughterhouse that he had authority to sell the cattle when he didn’t, according to court documents. Butikofer attempted to evade the requirements of the Packers and Stockyards Act of 1921 and its regulations, which would have protected the cattle investors’ funds.

In July 2020 and August 2020, Butikofer also defrauded the USDA of more than $1.2 million in emergency assistance funds designed to assist livestock producers in the COVID-19 pandemic.

In addition, in February 2022, Butikofer received over $1.5 million from the Small Business Administration as part of an application for an Economic Injury Disaster Loan, according to court documents. He made false representations to the SBA about his financial condition and intended use for the loan. Butikofer used part of the SBA funds to file for bankruptcy protection later that same month.

Prosecutors said Butikofer, during the bankruptcy case, perjured himself five times and made a series of false and fraudulent statements about his financial condition. In March 2022, he submitted a false statement of financial affairs in his bankruptcy case.

There were more than 100 creditors in Butikofer’s bankruptcy case, and Butikofer used the case to intentionally delay and hinder their legitimate collection efforts, according to court documents.

In 2018, Butikofer used forced labor to financially benefit Fawn Hollow, which later led to the lawsuit filed by three South African workers. Butikofer dumped dead cattle near a house where the H2-A visa workers lived on his farm. The workers had no hot water or furniture, and their water was contaminated. He also was accused of assaulting the workers.

In 2020, the three South African workers obtained a $247,000 civil judgment against Butikofer in federal court. Butikofer later used his fraudulent bankruptcy proceeding to persuade the workers to settle their judgment for $75,000.

While Butikofer’s criminal case was pending, he repeatedly contacted witnesses in violation of a court order, according to prosecutors. Butikofer also attempted to sway grand jury and trial witnesses into making false statements and signing false documents in attempts to obstruct justice.

U.S. District Chief Judge C.J. Williams, during sentencing last Friday, said Butikofer was operating a “Ponzi” scheme with investor cattle. Williams sentenced him to 188 months in prison. Butikofer also was ordered to make over $5.7 million in restitution, forfeit $500,000 and repay $5,000 in attorney fees.

Butikofer must also serve three years of supervised release following his prison term.

As part of his plea agreement, Butikofer promised to pay the South African workers the entire $247,000 judgment and to cease participation in the foreign labor programs.

The case was prosecuted by Assistant U.S. Attorney Timothy Vavricek and was investigated by the Small Business Administration, Office of Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General, U.S. Department of Agriculture, Office of Inspector General, U.S. Department of Labor, Office of Inspector General and Homeland Security Investigations.

Comments: (319) 398-8318; trish.mehaffey@thegazette.com