A Walters man was fined and sentenced to prison for selling property pledged as collateral for a farm loan.

Daniel Kluender, 41, pleaded guilty in March and was convicted of one count of conversion of property mortgaged or pledged to farm credit agencies. He was sentenced to one year and one day in prison, two years of supervised release, $314,000 in restitution to Farmers State Bank and over $566,000 in restitution to the U.S. Department of Agriculture’s Farm Service Agency.

Kluender took out a $1.3 million loan from Farms State Bank in Albert Lea in 2013, according to a press release. The loan, guaranteed by the Farm Service Agency, required Kluender to pledge collateral. Any sale proceeds from that collateral — which included crops, livestock, farm equipment, vehicles and others — was to be applied to Kluender’s loan payments.

He violated the terms of his loan when, between 2013 and 2017, he sold collateral without permission from the FSA and did not utilize the funds toward his loan payments. When, in July 2015, Farmers State Bank worked to collect on the loan by repossessing the collateral Kleunder pledged under the loan’s terms, Kleunder was physically violent against a bank employee, vandalized the collateral and continued to violate his loan terms by selling collateral.

According to the press release, Kluender also falsely testified about owning pledged property when he filed for Chapter 7 bankruptcy.

Kluender was sentenced July 25 in U.S. District Court in Minneapolis.

 

See what happened last night in the PM report here.