In a detailed new investigation, National Public Radio examined the U.S. Department of Agriculture’s recent allegations that some farmers across the country cheated the U.S. Treasury and insurers out of $160 million last year.
Interviews with 50 individuals in eight states–investigators, prosecutors, farmers, watchdogs and government regulators–reveal a “culture of cheating” that has grown up among a small group of farmers who exploit the nation’s government-backed crop insurance program.
In North Carolina, Robert and Vicki Warren are among eight people who pleaded guilty to swindling the government and insurance companies out of more than $9 million in bogus insurance claims from 1997 to 2003.
According to trial records, the Warrens–using cocktail ice and a disposable camera–staged a hailstorm to make it look like their tomatoes had been destroyed, so they could collect the insurance money.
The federal indictment states that a Virginia-based insurance agent coached the Warrens in detail on how to perpetrate the fraud, and the insurance adjustor testified that his supervisor at Fireman’s Fund Agri-Business told him to lie on crop-damage forms for the Warrens. A spokesman for Fireman’s Fund said neither the adjustor nor his supervisor work for the company anymore.
Although USDA officials estimate about 5 percent of indemnities paid out annually go to phony claims–about the same proportion found in other types of insurance–crooks are increasingly brazen, according to the USDA Inspector General’s Office, and the money they steal usually comes out of the U.S. Treasury.
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