LINCOLN, Neb. (DTN) -- Ag reality television star Steve A. McBee and two of his sons, Jesse and Cole, settled with the federal government over allegations that the family hid assets from potential collection after McBee pled guilty to crop insurance fraud.

The federal government will abandon efforts to unwind alleged fraudulent transfers in exchange for what will be a guaranteed recovery of $3.16 million in a forfeiture judgment that came from the crop insurance fraud plea deal.

In all, Steve A. McBee owes just over $4 million, according to the settlement filed in the U.S. District Court for the Western District of Missouri.

Steve A. McBee and his sons are Gallatin, Missouri, farmers and stars of "The McBee Dynasty: Real American Cowboys."

In exchange, the McBee family and any related family trusts and companies will avoid further fraud-related prosecution so long as restitution is met on the estimated $4 million owed.

"Steve A. McBee admitted that between 2018 and 2020, he received millions of dollars in federal crop insurance benefits to which he was not entitled," the settlement said.

"The total loss to the United States was $4,022,124.00. This settlement is neither an admission of liability by defendants, except to the extent admitted in Steve A. McBee's guilty plea in the criminal case, nor a concession by the United States that its claims are not well founded."

The trio is required to pay $300,000 within 14 days after the settlement takes effect. Additionally, the McBees are required to sell real estate to generate funds within 45 days.

So far, Steve A. McBee has met all but $861,365 in restitution from the crop insurance case, according to the settlement. Though the settlement does not create a remedy to pay the remaining balance, the U.S. government still is owed that money.

"Defendants shall provide a proposed listing agreement and list for sale with a licensed real estate broker two parcels of real property that have been identified to the government," according to the settlement.

Within 30 days, the McBees are required to provide a list of additional real property they intend to sell to fund the settlement amount. The McBees are required to pay $3.16 million within 10 months.

Steve A. McBee is required to make any outstanding restitution as part of his original plea deal.

Once payment is made in full, the U.S. government agreed not to subject any membership interests transferred in the family on or about Jan. 7, 2024, and Jan. 19, 2024, to Cole and Jesse McBee, to any restitution lien in the case.

The court also issued an order substituting the eldest son, Steven J. McBee, in his capacity as trustee of Jesse L. McBee and Cole H. McBee inheritance trusts, in place of James W. Bedsworth Jr.

The settled lawsuit filed after Steve A. McBee was sentenced alleged that he engaged in fraudulent business transfers to his sons to prevent certain assets from being seized by federal authorities as part of the sentencing process.

Among several requests for relief asked for in the lawsuit, prosecutors asked the court to nullify the transfers of interest and to readjust the sentence to reflect "actual equity interest."

Here is a timeline of events, according to the lawsuit:

-- In June 2023, Steve McBee was notified about the federal investigation.

-- In December 2023, McBee's attorney met with prosecutors.

-- On Jan. 7, 2024, McBee transferred ownership interests in three family LLCs to his sons.

-- In November 2024, McBee pleaded guilty.

McBee transferred his ownership interests in three companies to his sons Jesse and Cole. That includes 39% interest in McBee Properties L.C.; 99% interest in Rock Bluff Development LLC; and 99% interest in S&K Enterprises LLC. According to the lawsuit, Steve McBee split those interests evenly between Jesse and Cole.

The federal government alleged the transfers occurred while McBee was under federal investigation, and he received no payment in exchange.

The federal government's lawsuit included six claims for fraudulent conveyance under both federal and Missouri state law. The U.S. argues the transfers were made with actual intent to defraud the federal government, and the transfers were made without equivalent value when McBee knew he would face debts he couldn't pay.

Read more on DTN:

"McBee Settlement Nears in Fraud Case," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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