Published On: Fri, Nov 9th, 2018

Marathon County Man, Michael Deedon Sentenced for Fraud Scheme

Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Michael C. Deedon, 55, Marathon City, Wisconsin was sentenced today by U.S. District Judge William M. Conley to 24 months in federal prison for making a false statement to a bank.  Judge Conley also ordered that Deedon pay restitution to the victims in the amount of $13,234,643.17.  Deedon pleaded guilty to this charge on July 24, 2018.

Photo/Jody Davis

In 2013, Wisconsin Rapids Grain (WRG), a licensed U.S. Department of Agriculture (USDA) grain warehouse, failed.  USDA inspectors responded to WRG’s failure and conducted an audit of the business.  The audit uncovered a substantial discrepancy between the inventory of grain in the warehouse, and the quantity pledged to various financial institutions.  During the investigation, USDA inspectors learned WRG provided several banks, including Peoples State Bank in Wausau, Wisconsin, with non-USDA warehouse receipts.   WRG used these non-USDA warehouse receipts as collateral for draws against its lines of credit.  When USDA inspectors updated their calculations to include these non-USDA receipts, they concluded WRG’s inventory deficit for yellow corn was over 2 million bushels.  WRG’s inventory deficit for soybeans was over 390,000 bushels.

During search warrants executed by the Federal Bureau of Investigation (FBI) and USDA-Office of Inspector General (OIG), evidence was uncovered that implicated Douglas Weinkauf, WRG’s president.  Weinkauf was subsequently convicted for his role in the fraud, and was sentenced by Judge Conley to 36 months in prison.

As the investigation continued, agents from the FBI and USDA-OIG found evidence that Deedon prepared WRG’s 2012 year-end financial statement and submitted it to Peoples State Bank on or about May 1, 2013.  In this 2012 year-end financial statement, Deedon intentionally misrepresented WRG’s company-owned inventory values.  Peoples State Bank relied on this 2012 year-end financial statement and continued its lending relationship with WRG until the company failed.

During sentencing, Judge Conley highlighted the significant impact this fraud had on local banks and farmers who conducted business with WRG.

The charge against Deedon was the result of an investigation conducted by the FBI and the USDA–Office of Inspector General.  The prosecution of the case has been handled by Special Assistant U.S. Attorney Chadwick M. Elgersma.

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