"It was Leon who screwed everyone. I don't feel good about it," said Eric Andersen, who farms near Dike. "I'm not sure how he can be around and doing what he does."

Andersen, like hundreds of farmers throughout the years, participated in a Combine Roll program with Walterman. Under the agreement, a farmer buying a new combine turns the machine in at the end of the year for another one the following year. A second producer gets the 1-year-old combine maintained by the dealer, exchanging it later for another 1-year-old machine. The process continued from farmer to farmer, each getting similarly aged combines annually.

On Oct. 10, 2005 -- 11 days before the bankruptcy -- Andersen paid $15,000 for a 3-year-old combine to use the following year. He didn't get the harvester and lost the money. Following its audit of Walterman Implement, CNH Capital claimed the money from the roll program was never deposited in a secure escrow account and was missing. The deposits averaged from $15,000 to $22,000.

To date, Andersen said he's recovered half of the deposit in the form of special discounts for new and used equipment and special financing provided by Case New Holland. CNH Capital discovered fraud, misappropriation of funds, wrongful disposition of collateral and assets and diversion of corporate funds for Walterman's personal use, court documents show.

More than $400,000 was taken from the dealership by Walterman or given to third parties in the 10 months leading up to the bankruptcy, records said.

"I'm surprised nothing (legally) has happened … directly to Leon. I hope (there's) justice and he does some time," Andersen said. "If he really did (these) things, the judicial system should work right."

It's unclear when that day will come, if ever. No criminal charges have been filed against Walterman, according to court records.

Officials with the U.S. Attorney's Office for Northern Iowa and the Internal Revenue Service could not confirm nor deny an investigation of Walterman was ongoing as in the past, or if charges would be filed.

A spokesperson for The Federal Bureau of Investigations based in Omaha, Neb., referred questions about Walterman to the U.S. Attorney's Office.

"I just can't comment," said Bob Teig, public information officer for the U.S. Attorney's Office. "I understand (farmers are frustrated), but I'm not allowed to say anything."

The longer criminal charges aren't filed, Grundy County Sheriff Rick Penning believes that favors Walterman.

"You would think time would be on his side," Penning said.

Walterman's attorney, William Smith of Des Moines, said his client resolved issues with the bankruptcy court about six months ago.

As far as possible criminal proceedings, Smith said his client is aware of earlier investigations. But Smith said Walterman shouldn't be blamed for the farmers' misfortunes.

"I'm not sure Leon caused them to lose that money. Case pushed him into involuntary bankruptcy. Leon didn't push it into bankruptcy," Smith said.

An attempt to find Walterman at his home by the Courier was unsuccessful. His number is unlisted. Smith said he would advise his client not to be interviewed.

As far as the perception by some in and around Dike that Walterman likes to flaunt his money, Smith doesn't believe that's true.

"(Walterman) agreed he owed money (to bankruptcy court). He didn't have any money to pay it," Smith said.

Yet, Hanrahan said Walterman was able to buy back "Leon's Toys," as described in court documents. Walterman used money from the business to buy snowmobiles, personal watercrafts, a boat, four-wheelers, etc. and stored them on a piece of property owned by the business called the "Toy Shed," records state.

As long as Walterman had the money to buy back the toys, Hanrahan said he had every right to.

"Let me make this clear, Leon Walterman is not in bankruptcy. It's the business," Hanrahan said. "What he does in private has no bearing on how I administer (funds)."

Creditors are being paid, Hanrahan said. To date, she said $4.9 million has been divided between secured lenders, to pay priority claims and cover administrative costs. More than $2 million is waiting to be dispersed, she said.

Money to pay creditors was acquired by the sale of the dealership to Titan Machinery for $2.75 million and other businesses assets and property. Money also was collected from outstanding bills and litigation.

Carlson, a combine roll participant, lost a $16,000 down payment. He got about one-third back in incentives from Case and a $2,250 check from the bankruptcy court.

Calrson said knowing that he lost thousands while Walterman has luxury items and goes unpunished is disturbing.

"Oh yeah (I'm upset). I know he has money, but they're (law enforcement) probably not going to do anything. It's a white collar crime," Carlson said.

The business bankruptcy "doesn't mean he shouldn't own personal assets," Hanrahan said.

On July 9, 2007, Walterman's assets reportedly grew after purchasing a piece of property at 703 First St. in Dike. County records show Farmers Investment Group, with a mailing address of Walterman's home at 324 Daisy St., bought the land for $152,500. Records show the seller was Walterman Implement and the buyer was Leon Walterman.

Andersen said he was at the land auction. The assessed value of the property is $39,724, records show. The size wasn't provided.

"He (Walterman) was bidding that hard. I thought he came back to town to show he had money and rub everybody's nose in it," Andersen said.

It's unclear how much time Walterman spends in Dike. Smith said he "thinks" his client is living at his home. Some residents say they occasionally see Walterman in town driving a pick up with Illinois plates.

Walterman's next door neighbors, Betty and Neil Beck, said they rarely see him. Prior to the bankruptcy, residents said Walterman was a fixture in the community. Penning said deputies often had a difficult time finding Walterman to serve court papers.

Last week the home's lawn was about six inches tall, young trees were growing in the gutters, the shades were drawn and a utility termination notice from May for an unpaid bill of $2,675.97 still hung on a door.

At the same time, a battery charger was on and hooked up to the boat battery and tools were lying on the craft.

"I think he must do it at night," said Betty Beck. "(Leon and his ex-wife, Lynda) were good neighbors. Now we don't see him."

City officials said Walterman paid enough of the bill to avoid disconnection.

When the court-ordered sale of the Toy Shed occurred on May 10, 2007, Walterman was reportedly present. The city bought the property at 105 First St. for $200,000, which contains a pole building and an unspecified amount of land, according to county records.

The city plans on moving the volunteer fire department to the location.

Grundy County Deputy Chris Heerkes, who's also a volunteer firefighter in Dike, said he spoke with Leon at the auction.

"He said, 'if I really wanted that (Toy Shed), you wouldn't keep up (bidding) with me,'" Heerkes recalled. "You know he has cash some place."

The assessed value is $51,619 for the building and $20,921 for the land.

For farmers like Ted Hamer of Traer, knowing Walterman hasn't been charged with a crime and he's able to buy expensive property is upsetting. Hamer lost $16,000 in the roll program, but was able to recover most of it with a new combine discount from Case. He eventually traded in the red machine for a John Deere.

Penning said the federal judicial system often moves slow, but he still thinks Walterman could face criminal charges. Hanrahan said the bankruptcy case will remain active until at least 2010.

"I still can't believe it's been about three years and nothing has been filed," he said, referring to criminal charges.

Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com.