Three Family Members Sentenced in USDA Crop Loan and Bankruptcy Fraud Schemes

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

Three Northeastern Iowa family members were sentenced recently in federal court for their respective roles in crop loan and bankruptcy fraud schemes.

Aimee Lynn Rosenbaum, formerly known as Aimee Lynn Flatjord, age 53, from Lawler, Iowa, was sentenced to 78 months of imprisonment on April 28, 2022.  She was ordered to make $165,592.21 in restitution to the United States Department of Agriculture-Farm Services Agency (“USDA-FSA”) and $4,796 in restitution to a bank, to pay a $5,000 fine, and to repay $7,086.74 in attorney fees for her prior court-appointed counsel.  She must also serve a three-year term of supervised release after the prison term.  Aimee Lynn Rosenbaum received the prison term after a June 14, 2021 guilty plea to one count of conversion of property pledged to a farm credit agency and one count of bankruptcy fraud.

Donald Eugene Rosenbaum, age 58, from Cresco, Iowa, was sentenced to two years of probation on May 2, 2022.  He was also ordered to pay a $1,000 fine.  Donald Eugene Rosenbaum received the probation term after a June 10, 2021 guilty plea to one count of bankruptcy fraud.

Marshal Dillion Rosenbaum, age 27, from Fredericksburg, Iowa, was sentenced to three months of imprisonment and three months of home confinement on April 25, 2022.  He was also ordered to make $165,592.21 in restitution to the USDA-FSA, jointly and severally with Aimee Lynn Rosenbaum.  Marshal Dillion Rosenbaum received the prison term after a June 21, 2021 guilty plea to one count of conversion of property pledged to a farm credit agency.  He must also serve a three-year term of supervised release after the prison term. 

In the family members’ plea agreements, as well as through evidence at a three-day sentencing hearing for Aimee Lynn Rosenbaum, it was established that Aimee Lynn Rosenbaum (“Aimee”) and Donald Eugene Rosenbaum (“Donald”) historically farmed land in Chickasaw County, Iowa.  Marshal Dillion Rosenbaum (“Marshal”) is the son of Aimee and Donald.  In late 2014, Aimee directed Marshal to apply for a crop loan with the USDA-FSA for the 2015 crop year on the pretense that Marshal would be taking over the farm due to purported health problems of Aimee and Donald.  After Marshal obtained over $165,000 in loan proceeds and pledged the farm’s 2015 crop to the USDA-FSA, Aimee applied for and obtained over $1.3 million in loans from a local bank on the representation that Aimee and Donald would continue to farm the land that year.  The 2015 crop thus was double-pledged without the knowledge of the USDA or the bank.  Aimee applied for the bank loans on Donald’s behalf using a power of attorney she had obtained from Donald.

The Rosenbaums eventually defaulted on both loans and sold the double-pledged crop with little to no repayment.  After the bank started foreclosure proceedings on the Rosenbaums’ farm, Aimee and Donald filed five bankruptcy petitions in the United States Bankruptcy Court for the Northern District of Iowa. Aimee and Donald each filed two additional bankruptcy petitions in bad faith and on the eve of scheduled Sheriff’s sales in state court in order to frustrate and delay the bank’s attempts to obtain repayment for its loans to Aimee and Donald.  During one telephonic hearing in bankruptcy court in 2019, Aimee pretended to be Donald.  The district court also found that Aimee submitted false evidence and testimony to the district court at her sentencing hearing.

The Rosenbaums were sentenced in Cedar Rapids by United States District Court Judge C.J. Williams.  Aimee Lynn Rosenbaum and Marshal Dillion Rosenbaum were released on bonds previously set and are to surrender to the Bureau of Prisons on dates yet to be set.

The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and investigated by the United States Department of Agriculture, Office of Inspector General, and the Federal Bureau of Investigation. 

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl

The case file number is 19-CR-2078.

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