Kentucky county official pleads guilty in conspiracy to commit crop-insurance fraud

A county official in Central Kentucky has admitted taking part in fraud involving crop insurance, according to court records.

Randall D. Taulbee pleaded guilty Thursday in federal court to two charges of conspiracy to commit an offense against the U.S., meaning crop-insurance fraud.

Taulbee, a magistrate in Bourbon County, agreed not to appeal any sentence that does not exceed three years and six months in prison. Taulbee also agreed to pay restitution totaling $458,104 to an agency within the U.S. Department of Agriculture that underwrites crop insurance for farmers, plus $260,680 to AgriSompo North America, a private insurance company.

U.S. District Judge Karen K. Caldwell scheduled Taulbee to be sentenced in September.

The agreement said Taulbee should be liable for restitution jointly with James A. McDonald and Cherie Lynn Noble, who were charged with him in the scheme and pleaded guilty earlier.

Noble has argued she should only be liable for $3,028 because she received little from the scheme.

Noble is Taulbee’s sister and McDonald is his brother-in-law, according to court documents.

Taulbee owned and rented farm land in Bourbon and Nicholas counties and produced tobacco and corn.

Beginning in at least 2013 and continuing to late 2017, Taulbee worked with McDonald, according to his plea deal. At times he also worked with an insurance agent not named in the document to falsify crop-insurance policies a number of ways, according to his plea deal.

Those included reporting Taulbee grew more acres than he did, submitting false expense records from a farm-supply business, reporting he was the sole owner of a crop when in fact he shared it with McDonald and split an insurance check with him, failing to report sales of corn crops that would have offset loss claims, and submitting false claims.

Taulbee and McDonald bought crop insurance under Noble’s name, which meant a bigger payout for them because she was listed as a new producer. She turned over most of the money from damage claims to them, according to court records.

Assistant U.S. Attorney Kathryn M. Dieruf said in a separate motion that if Taulbee had gone to trial rather than pleading guilty, Noble would have testified that Taulbee approached her in 2015 and asked her to put his crops in her name.

Taulbee coached Noble on what she needed to do and say in applying for crop insurance and during meetings with adjusters looking at damage claims, according to the motion.

When Noble wrote checks to Taulbee and McDonald for their shares of insurance payments, Taulbee had her write “cattle” on the memo line to try to make it appear she was buying cattle from them, according to court records.

The motion from the prosecutor also detailed an incident in April 2018 when Taulbee allegedly impersonated his father in a phone call with a federal investigator. The investigator had called Taulbee’s father to try to see if he knew anything about the case.

A person claiming to be the father called the investigator back, but Noble would have testified she was there and that Taulbee was the one who made the call, according to the motion.

During the call, Taulbee claimed Noble had cattle and grew her own tobacco crop, according to the motion.

Taulbee got angry with the agent during the call and told the agent to leave Noble alone, according to the motion.

Noble also would have testified that when she received a letter notifying her she was under investigation, Taulbee told her it was only a scare tactic and not to worry, then told her to lie to federal agents and coached her on what to say, according to the prosecutor’s motion.

Noble did lie to agents at first, but ultimately admitted she didn’t own or rent any farm land or raise crops or cattle.

McDonald was also expected to testify against Taulbee if he had gone to trial.

The charges against Taulbee, McDonald and Noble are part of a larger investigation of what a prosecutor called a “staggering” level of crop-insurance fraud in Central Kentucky in which more than two dozen people have been convicted.

Those have included farmers, insurance adjusters and people associated with a tobacco warehouse.

Michael McNew, an agent who sold crop insurance, pleaded guilty in 2020, admitting he took kickbacks to help farmers file false insurance claims that led to $23 million in fraud losses to an insurance company and the government.

McNew was sentenced to seven years and two months in prison.