Moorhead man sentenced for bank fraud, owes $7.7 million
Butch Carpenter gave false information about his income and assets to gain a greater line of credit with banks.
ABERDEEN, S.D. — A 68-year-old Moorhead man and former South Dakota cattleman has been sentenced to federal prison for 10 years and ordered to pay $7.7 million in restitution for bank fraud.
Richard "Butch" Carpenter, who had pleaded guilty to the charge in June and failed to show up for an earlier hearing in September, was sentenced Monday, Nov. 29, in federal court in Aberdeen by U.S. District Judge Charles Kornmann.
His attorney, Tom Sannes, said Tuesday night they will appeal the sentencing.
Carpenter's conviction stems from a scheme that began in about 2008 and continued through early March 2020. He defrauded First Premier Bank of Watertown, South Dakota, by providing false and fraudulent information about his income to induce the bank to loan him money and give him a large line of credit, according to federal prosecutors.
He also inflated his assets by overstating his cattle sales and the number of cattle he had on hand.
Carpenter had started a custom cattle feeding operation in the 1980s but in 2008, he changed his operation to raising his own cattle on his rural Watertown farm. It was about that time he began falsifying the information to the bank.
He also falsified his tax returns and provided those to the bank in support of his inflated figures, according to prosecutors. In 2020, he also wrote bad checks between his First Premier account and another of his accounts at Reliabank.
Sannes, who is part of a Webster, S.D., law firm, said Carpenter had been fully cooperating with the government and the bank and had been making restitution.
When asked how much he had paid back, Sannes didn't have an exact figure but said originally Carpenter had probably owed millions more.
Carpenter had sold his land, cattle and equipment to begin the restitution, according to Sannes.
"He wanted to make it right," Sannes said about his client. "He had accepted responsibility and was cooperating fully with the the bank and the U.S. government."
When asked why Carpenter hadn't showed up a September sentencing hearing, Sannes simply said his client was depressed.
The lawyer said they were upset about the 10-year sentence as he said it was more than prosecutors had even asked for. They sought about seven years in prison.
He said they would appeal to the Eighth District Court of Appeals.
Carpenter has been working and living in Moorhead for about 18 months, Sannes said.
Carpenter was immediately taken into custody by the U.S. Marshals Service after his sentencing, and was ordered to five years of supervision after his prison release.
"He doesn't have anything left except the clothes on his back," Sannes said. He said they took Carpenter's pickup at his sentencing.
The case was investigated by the FBI, the South Dakota Division of Criminal Investigation and the Watertown Police Department.