NC Crop Insurance Fraud Case Receives National Recognition

It is likely the largest crop insurance fraud bust in U.S. history – and the head of USDA’s Risk Management Agency says it sends a positive signal to Capitol Hill about the key safety net program in the farm bill. the government’s unraveling of a 100-million dollar scheme by dozens of North Carolina crop insurance agents, adjusters, brokers and farmers to defraud the program is likely record breaking and key for the farm bill debate.

Forty-one defendants have either pleaded guilty or reached plea deals after profiting from false claims for losses of soybeans, wheat, corn and tobacco. RMA Administrator Brandon Willis on the probe by RMA, IRS and the Justice Department…
 

“These are the largest judgments rendered in the history of the crop insurance program. In the last month there have been two judgments for example, that have been rendered against adjusters and agents, one for $21 million and one for $8 million.”
 

The North Carolina scheme involved crops that weren’t damaged and farmers using aliases to sell their written-off harvests for cash. Willis says crop insurance fraud is not a victimless crime – premiums go up when this happens – which is why most farmers play by the rules. Does the North Carolina bust hurt the cause of crop insurance on Capitol Hill where key lawmakers want more cuts to the program amid a dwindling farm bill budget? Willis doesn’t think so…
 

“The lesson from this investigation is that crime doesn’t pay. It’s a positive story to tell that we will not tolerate fraud.”
 

Willis sees crop insurance staying around…

“Farmers themselves paid $4 billion dollars in premiums into the crop insurance program and it worked how it should. Those that had a disaster got a payment and those that didn’t, didn’t.”

Farmers paid close to 29-billion in premiums over the last decade. But, with last year’s historic drought, things flipped with farmers receiving nearly $15.5-billion as of March 4th on their $4-billion-plus in premiums.


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