A federal criminal case over cattle theft and wire fraud in Northeast Iowa highlights the vulnerability and abuse of foreign agricultural workers.
Michael Butikofer, 53, of St. Olaf in Clayton County, pleaded guilty Friday in Iowa’s Northern District to livestock theft, wire fraud and lying about his financial affairs in a bankruptcy proceeding. He faces up to 30 years in prison.
Prosecutors allege Butikofer, who operated an animal-feeding operation called Fawn Hollow, used “threats of violence, violence, and loss of employment or legal status” to keep foreign workers from blowing the whistle on a criminal enterprise in which he sold cattle belonging to other people for his own gain.
The criminal case follows a 2020 civil judgment that required Butikofer to pay three South African workers nearly $250,000 based on allegations he verbally and physically abused them — including by allegedly pushing one man toward a grain auger and threatening to throw him in — did not provide them promised wages and did not fully reimburse them for their travel costs to Iowa.
In the recent charges, prosecutors say Butikofer ran an unlicensed custom cattle operation where employees would raise and care for cattle owned by other people, including investors from across the United States. Fawn Hollow then sold the cattle, primarily to a Wisconsin slaughterhouse.
Michael Butikofer (Linn County Jail)
Between July 2020 and February 2022, Butikofer sold cattle belonging to six investors and pocketed the money, the U.S. Attorney’s Office said Tuesday in a news release.
Butikofer defrauded the U.S. Department of Agriculture of more than $200,000 in pandemic aid for livestock producers by filing applications for another person who did not own cattle and then intercepting the payments, prosecutors allege.
The Small Business Administration paid Butikofer $1.5 million as part of his application for an Economic Injury Disaster Loan, according to the news release.
“Butikofer falsely stated to the SBA that he would use the proceeds ‘solely as working capital to alleviate economic injury caused by’ the COVID-19 pandemic,” the news release states. Instead, Butikofer used part of the money to pay an attorney to help him file for bankruptcy protection.
He filed false financial statements as part of his bankruptcy case and lied under oath at a meeting with creditors, the news release states. The bankruptcy case later was dismissed.
Butikofer’s use of H-2A visas and alleged mistreatment of foreign workers first was heard in U.S. District Court in 2019, when three South African workers — Shane West, Scharl Oberholzer and Hennie Jordaan — sued him to recover lost wages and travel expenses and for emotional distress.
Butikofer recruited the men in 2018 under the H-2A visa program, which allows U.S. agricultural employers to hire foreign workers on a temporary basis if there are no U.S. citizens who want the jobs. West, Oberholzer and Jordaan were hired to help with growing corn silage, according to the men’s lawsuit.
The lawsuit alleged Butikofer lodged the men in substandard housing with rotting animal carcasses outside and no hot water for two weeks. The men said Butikofer yelled at them and often insulted their nationality, calling them “dumb South Africans” and “third-world trash,” the lawsuit said.
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The men said they saw Butikofer tie another South African worker’s hand to an electric saw so he could not stop using the machine.
“The following day, Butikofer lost his temper with the same co-worker and threatened to ‘put a shock collar around (his) neck like a dog and shock him” so that he would work faster,“ the suit states.
On Nov. 3, 2018, Butikofer pushed Jordaan toward a grain auger and threatened to push him in, the lawsuit states.
Butikofer did not pay the men what he promised and never fully compensated them for their travel expenses, the lawsuit states. If workers complained, Butikofer threatened to send them back to South Africa or revoke their visas.
“Defendant solicited plaintiffs as agricultural workers from a foreign country, inducing them to leave their homes and travel to another country in reliance upon his written assurances of compensation for their travel, free accommodations in compliance with federal health and safety regulations, and a safe work environment,” U.S. District Court Judge C.J. Williams wrote in the default judgment in 2020.
Butikofer “has committed the intentional and outrageous conduct that calls for the imposition of punitive damages,” Williams said.
Even after Williams ordered the $247,050 judgment, Butikofer continued to misuse the H-2A program, prosecutors alleged in the criminal case.
“From April 2023 to November 2023, while on federal pretrial release, Butikofer recruited and caused Individual-1 to recruit H-2A workers to the United States under false and fraudulent pretenses, representations, and promises,” the news release said.
As part of his plea agreement, Butikofer has agreed to voluntarily terminate and cease participation in foreign labor programs.
The U.S. Department of Labor certified about 370,000 temporary jobs nationwide in fiscal 2022 under the H-2A visa program, the USDA reported. About 80 percent of certified jobs usually result in an issued visa.
About 6,000 agricultural workers had H-2A visas in Iowa in fiscal 2022, with workers coming from Mexico, South Africa, Algeria, Chile, Costa Rica, Argentina, the Netherlands, Russia and Canada, Iowa Workforce Development told The Gazette.
“In general, in the H-2A program, the employer basically controls the immigration status, your housing, your transportation, your ability to work in this country,” said Lorraine Gaynor, an attorney with Iowa Legal Aid who represented the South African men in their 2019 lawsuit. “Workers are vulnerable in that if it’s not a good situation, the employer holds all the cards. You can’t just quit and get in your car and find another job. All of those things are controlled by your employer.”
Abuse of H-2A workers, a problem across the United States, includes wage theft, substandard housing and dangerous work conditions, according to Investigate Midwest. A hotline run by the Polaris Project, a not-for-profit that fights human trafficking, identified 2,841 H-2A workers who had been subjected to labor trafficking, the news outlet reported.
Butikofer paid the judgment earlier this year, five years after the alleged abuse.
www.thegazette.com
Michael Butikofer, 53, of St. Olaf in Clayton County, pleaded guilty Friday in Iowa’s Northern District to livestock theft, wire fraud and lying about his financial affairs in a bankruptcy proceeding. He faces up to 30 years in prison.
Prosecutors allege Butikofer, who operated an animal-feeding operation called Fawn Hollow, used “threats of violence, violence, and loss of employment or legal status” to keep foreign workers from blowing the whistle on a criminal enterprise in which he sold cattle belonging to other people for his own gain.
The criminal case follows a 2020 civil judgment that required Butikofer to pay three South African workers nearly $250,000 based on allegations he verbally and physically abused them — including by allegedly pushing one man toward a grain auger and threatening to throw him in — did not provide them promised wages and did not fully reimburse them for their travel costs to Iowa.
Livestock theft charges detailed
In the recent charges, prosecutors say Butikofer ran an unlicensed custom cattle operation where employees would raise and care for cattle owned by other people, including investors from across the United States. Fawn Hollow then sold the cattle, primarily to a Wisconsin slaughterhouse.
Between July 2020 and February 2022, Butikofer sold cattle belonging to six investors and pocketed the money, the U.S. Attorney’s Office said Tuesday in a news release.
Butikofer defrauded the U.S. Department of Agriculture of more than $200,000 in pandemic aid for livestock producers by filing applications for another person who did not own cattle and then intercepting the payments, prosecutors allege.
The Small Business Administration paid Butikofer $1.5 million as part of his application for an Economic Injury Disaster Loan, according to the news release.
“Butikofer falsely stated to the SBA that he would use the proceeds ‘solely as working capital to alleviate economic injury caused by’ the COVID-19 pandemic,” the news release states. Instead, Butikofer used part of the money to pay an attorney to help him file for bankruptcy protection.
He filed false financial statements as part of his bankruptcy case and lied under oath at a meeting with creditors, the news release states. The bankruptcy case later was dismissed.
Alleged abuse of foreign workers
Butikofer’s use of H-2A visas and alleged mistreatment of foreign workers first was heard in U.S. District Court in 2019, when three South African workers — Shane West, Scharl Oberholzer and Hennie Jordaan — sued him to recover lost wages and travel expenses and for emotional distress.
Butikofer recruited the men in 2018 under the H-2A visa program, which allows U.S. agricultural employers to hire foreign workers on a temporary basis if there are no U.S. citizens who want the jobs. West, Oberholzer and Jordaan were hired to help with growing corn silage, according to the men’s lawsuit.
The lawsuit alleged Butikofer lodged the men in substandard housing with rotting animal carcasses outside and no hot water for two weeks. The men said Butikofer yelled at them and often insulted their nationality, calling them “dumb South Africans” and “third-world trash,” the lawsuit said.
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The men said they saw Butikofer tie another South African worker’s hand to an electric saw so he could not stop using the machine.
“The following day, Butikofer lost his temper with the same co-worker and threatened to ‘put a shock collar around (his) neck like a dog and shock him” so that he would work faster,“ the suit states.
On Nov. 3, 2018, Butikofer pushed Jordaan toward a grain auger and threatened to push him in, the lawsuit states.
Butikofer did not pay the men what he promised and never fully compensated them for their travel expenses, the lawsuit states. If workers complained, Butikofer threatened to send them back to South Africa or revoke their visas.
“Defendant solicited plaintiffs as agricultural workers from a foreign country, inducing them to leave their homes and travel to another country in reliance upon his written assurances of compensation for their travel, free accommodations in compliance with federal health and safety regulations, and a safe work environment,” U.S. District Court Judge C.J. Williams wrote in the default judgment in 2020.
Butikofer “has committed the intentional and outrageous conduct that calls for the imposition of punitive damages,” Williams said.
Even after Williams ordered the $247,050 judgment, Butikofer continued to misuse the H-2A program, prosecutors alleged in the criminal case.
“From April 2023 to November 2023, while on federal pretrial release, Butikofer recruited and caused Individual-1 to recruit H-2A workers to the United States under false and fraudulent pretenses, representations, and promises,” the news release said.
As part of his plea agreement, Butikofer has agreed to voluntarily terminate and cease participation in foreign labor programs.
‘Employer holds all the cards’
The U.S. Department of Labor certified about 370,000 temporary jobs nationwide in fiscal 2022 under the H-2A visa program, the USDA reported. About 80 percent of certified jobs usually result in an issued visa.
About 6,000 agricultural workers had H-2A visas in Iowa in fiscal 2022, with workers coming from Mexico, South Africa, Algeria, Chile, Costa Rica, Argentina, the Netherlands, Russia and Canada, Iowa Workforce Development told The Gazette.
“In general, in the H-2A program, the employer basically controls the immigration status, your housing, your transportation, your ability to work in this country,” said Lorraine Gaynor, an attorney with Iowa Legal Aid who represented the South African men in their 2019 lawsuit. “Workers are vulnerable in that if it’s not a good situation, the employer holds all the cards. You can’t just quit and get in your car and find another job. All of those things are controlled by your employer.”
Abuse of H-2A workers, a problem across the United States, includes wage theft, substandard housing and dangerous work conditions, according to Investigate Midwest. A hotline run by the Polaris Project, a not-for-profit that fights human trafficking, identified 2,841 H-2A workers who had been subjected to labor trafficking, the news outlet reported.
Butikofer paid the judgment earlier this year, five years after the alleged abuse.
Iowa criminal case highlights vulnerability of foreign farmworkers
Prosecutors allege Michael Butikofer, who operated an animal-feeding operation called Fawn Hollow, used “threats of violence, violence, and loss of employment or legal status” to keep foreign workers from blowing the whistle on a criminal enterprise in which he sold cattle belonging to other...
www.thegazette.com
