Lynch Livestock Fraud Scheme: Charges, Sentencing, and Penalties

The Lynch Livestock fraud scheme was a nearly two-decade operation in which a Waucoma, Iowa hog dealer and four of its managers cheated Midwest livestock producers out of more than $3 million by faking weights, headcounts, and quality grades on hogs delivered to its buying stations. The company, formally Lynch Family Companies, Inc., pleaded guilty in federal court and was sentenced in February 2023 to five years of probation, a $196,000 fine, and more than $3 million in restitution. Four managers were sentenced the month before.¹

How the Scheme Worked

From the early 2000s through March 2021, Lynch employees at buying stations across the Midwest shorted producers in three ways: they undercounted the hogs delivered, downgraded their quality classifications, and understated their weights. Back at headquarters, staff produced fraudulent scale tickets and invoices so the paperwork matched the manipulated numbers rather than what farmers were actually owed.¹

Between 2018 and 2021, the tactics got physical. Employees used crowbars and similar tools to lift the weighing platform during a load, so the scale read lower than the actual weight. When USDA investigators showed up, staff shredded and burned records.¹²

Victims ranged from individual farmers to large corporate swine operations. At sentencing, U.S. District Judge C.J. Williams called it “a systematic method of cheating and stealing” and said “the nature of the fraud was to rip off people little by little, day by day.”¹

USDA Caught Them Once and They Kept Going

Lynch Livestock was registered as a dealer under the Packers and Stockyards Act of 1921. In 2017, after a USDA Office of Inspector General investigation, the company signed an administrative consent decision and paid nearly $800,000 in restitution to two corporate customers whose hogs had been fraudulently weighed and graded at two Iowa buying stations.¹

The fraud continued anyway. The crowbar-on-the-scale phase happened after that 2017 order, in direct violation of it. A second USDA consent decision followed in 2021, adding more than $400,000 in restitution to various farmers and producers. Federal criminal charges came after that.¹

Who Was Charged and What They Got

The case was filed in the Northern District of Iowa. Lynch Family Companies, Inc. pleaded guilty on July 29, 2022, to one count of failing to comply with an order of the Secretary of Agriculture. Four managers pleaded guilty separately.¹

Judge Williams sentenced the four individuals on January 13, 2023:

Billie Joe Wickham, who reported to the company’s second-ranking official and directed employees to stamp fraudulent scale tickets and manipulate swine sorting, pleaded guilty to conspiracy to defraud the United States. He received six months in prison, three years of supervised release, and a $3,000 fine.
Charlie Lynch, involved in sow procurement and marketing, had reduced quality classifications on sows sold to the company between 2013 and 2017. He pleaded guilty to conspiracy to defraud the United States and got five years of probation and a $3,000 fine.
Leland “Pete” Blue, who managed sow inventory and had been part of the scheme since no later than 2012, pleaded guilty to conspiracy to defraud the United States. He received five years of probation and a $1,000 fine.
Tyler Thoms, who worked as a bookkeeper forging scale tickets before managing the Waucoma buying station and using a crowbar on the scales between 2018 and 2021, pleaded guilty to causing a livestock dealer to keep inaccurate accounts and records. He got one year of probation and no fine.

The company itself was sentenced on February 10, 2023: five years of probation, a $196,000 fine, and more than $3 million in restitution to producers. The restitution total included credit for roughly $1.2 million already paid through the 2017 and 2021 USDA consent decisions, leaving about $1.8 million in new payments to be distributed to victims through future court proceedings.¹³

South Dakota Added Its Own Penalty

The federal case wasn’t the last word. In April 2024, the South Dakota Animal Industry Board reached an agreement with Lynch Livestock over its license to operate in the state. The board ordered a 15-day closure of the company’s two South Dakota buying stations, in Aberdeen and Alexandria, and required Lynch to post a $100,000 letter of credit to cover potential restitution claims from South Dakota producers. The letter of credit covers claims filed within three years of the agreement for damages occurring on or before February 10, 2023.⁴

What the Company Looks Like Now

Lynch Livestock is still in business. When the USDA enforcement actions became public in July 2021, owner Gary Lynch renamed the existing entity Lynch Family Companies Inc. and incorporated a new entity under the Lynch Livestock name with the Iowa Secretary of State on July 15, 2021.⁵

The company said it fired the employees behind the buying violations, hired pork-industry veteran Dan Sutherland to lead Lynch Livestock, and set up an internal whistleblower process along with new employee training and oversight. Gary Lynch, the chairman, said the company took responsibility for what he called “past sorting and weighing issues.”⁶⁵

The Lynch Livestock division, now led by CEO Carl Treiber, operates 23 marketing locations across the Midwest, down from 39 buying stations across eight states at the time of the 2021 fallout.⁷⁵

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