Karl Knutson, Storm Claim Deception, MN 2013

Karl Knutson, 28, is paying $15,000 in civil penalties after admitting he lied to the federal government about cattle deaths following the devastating 2013 winter storm Atlas. While already serving a 12-month prison sentence for criminal fraud, Knutson has now settled the government’s civil case tied to his false claims against the USDA’s Farm Service Agency Livestock Indemnity Program.

Knutson claimed he lost 129 head of cattle during the storm—a claim that triggered federal disaster aid. Investigators later proved he lost no more than 13 animals. The massive discrepancy triggered a probe by the U.S. Department of Agriculture, Office of Inspector General (OIG), which uncovered a deliberate scheme to exploit emergency relief funds meant for struggling ranchers.

Under the False Claims Act (31 U.S.C. § 3729), individuals who knowingly submit false claims face penalties of $5,500 to $11,000 per false claim, plus triple damages. Knutson’s criminal conviction earlier this year included a $7,380.04 fine and a $100 special assessment to the Federal Crime Victims Fund, on top of his prison term and three years of supervised release.

The civil settlement, reached with the U.S. Attorney’s Office for South Dakota, closes the government’s financial case against Knutson. Though he’s already behind bars, the civil penalty underscores the federal crackdown on fraud targeting agricultural disaster relief programs—funds strained even in the best of times.

Assistant United States Attorneys Benjamin Patterson and Cheryl Schrempp DuPris handled the criminal and civil prosecutions respectively. The DOJ emphasized that both criminal penalties and civil recoveries remain top priorities in fraud cases, especially those that divert aid from legitimate victims of natural disasters.

The October 2013 storm Atlas dumped historic snow across the Great Plains, killing thousands of livestock and devastating ranching communities. Knutson’s exploitation of that tragedy has now resulted in full criminal accountability and financial restitution—a warning to others tempted to game the system during public crises.