MONTOUR | A Tama County farmer has been sentenced to prison for lying to a bankruptcy court about his assets.
Authorities said Jay Freese of Montour borrowed money from Lincoln Savings Bank and then attempted to evade his financial responsibility by hiding his assets and misleading creditors, the court and investigators.
Judge Linda Reade sentenced Freese to 18 months in prison during a Thursday hearing in U.S. District Court in Cedar Rapids. She also ordered him to pay a $5,000 fine and a $100 civil penalty. He will be on supervised release for three years following prison.
Freese pleaded guilty to one count of concealing assets in a bankruptcy case.
Authorities said Freese ran into debt problems with his hog operation. He obtained an operating loan from Lincoln Savings and put up equipment including a Bobcat, Kubota tractor and ATVs as collateral, according to court records.
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He later traded the ATVs for a corn-burning stove valued at $10,700, and not long after that, he filed for bankruptcy in 2009. Records allege he didn’t list the ATVs or the stove in his bankruptcy filing.
At the time, he owed $354,000 to Lincoln Savings, court records state.
Bank officials reviewed Freese’s bankruptcy and found he hadn’t listed assets he had claimed in his loan. When Freese was questioned about the Bobcat and the tractor, he said he sold the equipment to a man who investigators later determined was his brother-in-law.
Further investigation revealed there was no sale, but Freese had given his sister $5,700 in cash and told her to write a check for that amount so it would look like a payment for the equipment, records state. FBI agents searched Freese’s property and found the equipment.
They also found five firearms, a boat, a snowmobile, a collection of farm toys and $22,102 in cash Freese hadn’t disclosed in the bankruptcy, according to court records.