A North Carolina resident has been indicted on federal charges alleging a multi-million dollar fraud scheme tied to the USDA’s Discrimination Financial Assistance Program.
A federal grand jury in Charlotte returned an indictment charging Linda Faye Hough, 64, of Rockingham, N.C., with one count of mail fraud and six counts of making false, fictitious, or fraudulent claims to a federal program in connection with more than $9 million in DFAP applications. The indictment alleges Hough organized and promoted a series of fraudulent applications between January and August 2024. Prosecutors say the scheme targeted funds intended to compensate farmers and landowners who experienced discrimination.
The Inflation Reduction Act created the DFAP in 2022 and set aside $2.2 billion to resolve past discrimination in USDA lending programs. Applicants had to show they owned or leased farmland, had participated in or tried to participate in a USDA farm loan program, experienced discrimination by USDA employees, and suffered financial losses. Individual awards were capped at $500,000 per applicant, and eligibility required supporting documentation.
According to the indictment, Hough allegedly submitted false DFAP applications for herself and others that overstated eligibility and fabricated necessary documentation to make applicants appear qualified for awards. In some instances, the complaint says she solicited and received kickback payments from recipients after awards were disbursed. Hough is accused of arranging for roughly $9 million in fraudulently obtained DFAP funds to be paid to her and other applicants.
“Regardless of the program, hard-earned taxpayer dollars should be spent where Congress intended, not to personally benefit those who exploit the system,” said U.S. Attorney Russ Ferguson. “My office is committed to rooting out fraud, safeguarding taxpayer dollars, and preserving the integrity of federal assistance programs.”
“A program designed to remedy wrongdoing instead turned into another vector for criminals to defraud the taxpayer. The USDA Office of Inspector General is committed to ensuring taxpayer money is wisely spent. Those who steal from the public can expect to be found and prosecuted to the fullest extent of the law,” said USDA Inspector General John Walk.
Investigators say Hough acted as a promoter, using her knowledge of the application process to prepare and submit claims that contained false statements about ownership, participation in loan programs, and claimed discrimination. The indictment alleges a pattern of conduct in which false paperwork and misleading statements were used to obtain awards, and that some awardees later paid a portion back to Hough.
“When a federal program is defrauded, every taxpayer becomes a victim and those deserving of assistance are essentially robbed of much needed financial help. Fighting fraud is one of the highest priorities in the FBI. We will work tirelessly with our law enforcement partners to take down anyone who unlawfully obtains federal assistance to use in their personal piggy banks,” said Reid Davis, the FBI Charlotte Special Agent in Charge.
Hough had her initial appearance in federal court earlier this week. If convicted, she faces a maximum statutory sentence of 20 years in prison for the mail fraud count and up to five years for each count of filing false, fictitious, or fraudulent claims to a federal program. Any sentence will be set by a federal judge after considering the U.S. Sentencing Guidelines and statutory factors.
The investigation was handled by the USDA Office of Inspector General and the FBI, with assistance from the North Carolina State Bureau of Investigation Financial Crimes unit. Special Assistant U.S. Attorney Eric Frick of the U.S. Attorney’s Office in Charlotte is prosecuting the case. The charges are allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in court.
The Department of Justice recently announced a National Fraud Enforcement Division focused on investigating and prosecuting major fraud against federal benefit programs. That effort, along with other federal initiatives, aims to identify and dismantle schemes that divert taxpayer funds away from intended beneficiaries and into the hands of bad actors.
https://x.com/FBICharlotte/status/2082524569919721948
