3 Farmers Facing Jail Time for Crop Insurance Fraud

Posted December 13, 2018 by Administrator in Uncategorized | 0 comments

Tobacco Fraud Nets 60 Months Jail Time

Crop insurance fraud carries heavy penalties including steep fines and jail time. However, these deterrents don’t always work as intended. Crop insurance fraud comes in a variety of forms, and the following cases highlight some of the potential abuses.

Debra Muse of Willingford, Kentucky pleaded guilty to fraud on April 16, 2018. The judge sentenced her to 60 months of jail time as well as ordered her to pay $1,656,275 in restitution. She and several cohorts filed false claims with the Federal Crop Insurance Corporation (FCIC) in an attempt to obtain insurance money without actual cause.

They did so by falsifying tobacco production reports, bills,and shipping documents. As a result, they received inflated payments from their insurers who then sought recompense from the federal government. Under federal law, Muse will have to serve 85% of her sentence (51 months minimum) before she is eligible for release.

LaGrange Farmer Receives 25-Month Jail Sentence for Fraud

On May 30, 2018, a judge sentenced James Wiggins, Jr. of LaGrange, NC to 25 months of jail time and ordered him to pay $5,600,433 for several offenses including identity theft, conspiring to commit money laundering, and making false statements to the FCIC. Wiggins and his co-conspirators filed false insurance claims as well as disaster relief claims and then engaged in illegal activities to try to conceal the fraud. They filed false claims alleging they lost crops to receive an insurance payout while selling the healthy crops in secret transactions.

Farmer Faces up to 30 Years per False Statement

Though not yet scheduled, Christopher Hickerson, a farmer from Lexington, KY is facing a ten-count indictment for making false statements to the FCIC. Dating back as far as 2009, Hickerson falsified his tobacco production while simultaneously claiming a significant amount of damage. Hickerson laid claim to tobacco produced by other farmers to inflate his claims. He also obtained crop insurance under other individuals’ names to capitalize on new producer insurance bonuses. For every false statement made to the FCIC, Hickerson faces 30 years in prison as well as a fine of $1,000,000.

As outlined above, crop insurance fraud is not worth the cost. At Cline Wood, we dedicate our time to helping farmers and other agribusiness leaders understand their insurance needs. To learn more about the risks facing your farm as well as how to protect against them, contact us.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh& McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions,conditions, information or factors are inaccurate or incomplete or should change.

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