Kentucky farmer sentenced to jail, nearly $1 million in restitution in federal case

A Kentucky farmer who illegally sold cattle which were supposed to be used as collateral for a $1 million loan has been sentenced to a year and a day in jail.

Peter Alex Cox also must spend a year on home detention after he is released from jail. Chief U.S. District Judge Danny C. Reeves sentenced Cox, of Boyle County, on Friday in federal court in Lexington.

Cox previously pleaded guilty to illegal conversion of loan collateral.

Reeves also ordered Cox to pay restitution of $913,936 to the Farm Service Agency, which is part of the U.S. Department of Agriculture, and $70,563 to Central Bank Agricultural Credit Association.

Cox obtained a line of credit beginning in 2013 that eventually increased to more than $1 million.

He pledged cattle he owned as collateral for the loan, but between May 2019 and October 2019 he sold hundreds of them without notifying the lenders or paying the loan, according to his plea agreement.

Cox sold some cattle under a fake farm name, High Ridge, and also sold cattle at unauthorized locations to keep buyers from finding out they were pledged toward a loan, his plea deal said.

Cox’s attorneys, Ephraim W. Helton and Evan M. Rice, said in a sentencing memorandum that Cox’s financial struggles got worse in 2018 and his expenses outstripped his revenue.

Cox’s intent in selling the cattle was to generate some cash for short-term expenses and use some of the money to buy back some cattle at a lower price to build back his herd, his attorneys said.

“In Alex’s mind, he would eventually be able to dig out of the hole that he was in and replace the collateral with no harm being done,” his attorneys wrote. “Unfortunately, that was not the reality.”

Reeves imposed several conditions on Cox that prosecutors had sought, including that he use any proceeds from the sale of his 2000 Chaparral ski boat to pay restitution, that he put any money he earns in one account and make bank statements available to the U.S. Attorney’s Office, and that he put any distribution from a retirement account toward his restitution.

Any inheritance, financial settlement, tax refund or lottery winnings he receives will have to go toward paying restitution as well under the sentencing order.