Farm family faces federal trial

This article submitted on 4/26/00.

The federal trial of Ron and Diane Mages, and their son, Jason, began last Wednesday, April 19, in U.S. District Court in Minneapolis.

Ron and Diane Mages were indicted on more than 40 counts by a federal grand jury last October. The government accuses them of bankruptcy fraud, wire fraud, mail fraud, and money laundering. Jason Mages was charged with two counts.

After a week of trial, the prosecution expected to rest their case either today or tomorrow, according to the U.S. Attorney's office. The defense could start to present its case later this week.

In her opening argument to the court, Assistant U.S. Attorney Mimi Wright said the family schemed to hide assets from creditors before declaring bankruptcy in 1994. She also said they defrauded the government by accepting federal farm program payments for which they were not eligible.

Defense attorney Peter Wold maintained that the family struggled through the farm crisis of the 1970s and 1980s, became encumbered with debt, and simply followed their lawyer's advice in declaring bankruptcy, according to theSt. Cloud Times.

Ron and Diane Mages's bankruptcy settlement in 1994 reduced their debt to creditors from $1.9 million to $300,000.

A point of contention in the trial is the ownership of two corporations: RODI and GMI. The government claims that RODI was used to hide assets from the bankruptcy court, while the defense argues that these corporations were owned by Clem Jebb, a neighbor of the Mages family. There will be no testimony in the trial from Jebb, who died in March.

The government charges that Jason Mages helped pay the creditors with assets hidden in RODI.

The government also charges that a wetland was illegally drained on land owned by GMI. The prosecution contends that Ron and Diane Mages hid their ownership in GMI so they could continue to receive federal farm program payments for the crops on the rest of their land. The government alleges that Ron and Diane Mages received $113,000 in illegal payments from the United States Department of Agriculture, which led to mail and wire fraud charges against the couple.

The defense argues that Ron and Diane Mages did not own GMI and that they did not alter the wetlands in such a way to disqualify it from federal programs, according to theTimes.

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