-6-
the Agriculture Department revoked the settlement agreement and
reinstated the full amount of the farm loan debt. Cook Farms
made no further attempts to repay the farm loan debt.
2. The Lawsuit
On February 5, 1996, the United States, acting through the
Agriculture Department (hereinafter the Government), filed a
complaint against Bob, Byron, Ann, and Cook Farms in the United
States District Court for the District of Oregon (the farm loan
lawsuit). United States v. Cook, No. CV96-172-RE (D. Or.). As
stated in the complaint, the Government sought a judgment that
Bob, Byron, Ann, and Cook Farms were obliged to repay the full
amount of the farm loan debt with interest.
On September 13, 1996, the Government filed an amended
complaint naming petitioner as a defendant to the farm loan
lawsuit and expanding its legal theories for recovery. The
amended complaint included additional counts titled “Conspiracy”,
“False Claims Act”, “Fraudulent Conveyance”, and “Unjust
Enrichment”. The Government alleged: (a) Bob and Byron were
secret partners in OMCC; (b) Owen and petitioner conspired with
Bob and Byron to defraud and hinder the Government in its efforts
to collect the unpaid farm loans by organizing OMCC and holding
all business and personal assets in the names of OMCC or
petitioner; (c) Bob and Byron made false statements to the
Government by failing to disclose their partnership interests in
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