Texas Farmers Plead Guilty to Crop Insurance Fraud

Three Nolan County, Texas, farmers pleaded guilty in a Lubbock federal court
July 12 to filing over $540,000 in fraudulent crop insurance claims with the
federal government.

According to the Lubbock Avalanche-Journal, the farmers, Keith Johnson, Michael John Massey and Gaines Hunter Price, admitted to submitting false crop insurance claims for cotton, wheat and grain sorghum to the U.S. Department of Agriculture’s Federal Crop Insurance Corporation and Risk Management Agency in 1999. After receiving payment for the claims, the farmers applied for additional crop disaster payments. Insurers paid out $440,000 for the false claims before the fraud scheme was discovered. Each man faces up to five years in prison and $250,000 in fines.

The farmers’ case grew out of a March guilty plea of a former adjuster for Fireman’s Fund Insurance Co., Darren Randell Jeffrey of McCaulley in Fisher County. The Avalanche-Journal said Jeffrey admitted to falsifying crop losses for $718,946 in claims paid by the Federal Crop Insurance Corp. to six Nolan County farmers. Another $353,071 in fraudulent claims for federal disaster relief was never paid.

The U.S. Attorney’s Office said the farmers made insurance claims in fields they never planted, and Jeffrey falsified various appraisals related to the claims. Prosecutors speculated that such fraudulent activity occurs frequently in Texas, as well as the rest of the country, but praised the many Nolan County farmers who helped identify the people involved in the scam. Authorities said the case was still under investigation and that more convictions were expected in the future.

Topics Texas Fraud Claims Agribusiness