Insurance Co. and Colorado Farmers Settle Fraud Claim

Two Colorado potato farmers and the Great American Insurance Company have agreed to settle a case in which they are accused of making false crop insurance claims for $131,000, the U.S. attorney in Denver, John Walsh, announced this week.

In the case, the U.S. attorney alleged that the two farmers, husband and wife Donald Boyd Bigelow and Janet Kerkman Bigelow, who own two farms in Center, Colo., submitted false claims to Great American. Great American, in turn, was reimbursed by the U.S. Department of Agriculture, the Federal Crop Insurance Corp., and the Risk Management Agency.

The federal government alleged that Great American did not follow proper policy and procedure in adjusting the farms’ insurance claims, and that, as a result, the United States paid money that it should not have paid.

In February 2004, the Bigelows purchased crop insurance for their two farms from Great American to cover potential losses for their 2004 potato crops. Later that year, they submitted claims for losses they claimed to have sustained to their respective potato crops due to weather-related causes. Representatives for the Bigelows signed certifications stating that they had destroyed all “zero value production” potatoes – potatoes with no commercial value – from their 2004 potato crops. However, the farmers did not destroy all of the zero value production potatoes from their 2004 crop. In fact, they sold some of those potatoes.

Great American made indemnity payments of $270,607 and $307,982 to the two farms, respectively, to cover the crop losses. The United States then reimbursed Great American for a portion of those payments.

The Bigelows have paid the United States $66,000, and GAIC has paid the United States $65,000.

The alleged misconduct came to light following an investigation of a civil case by a special agent of the U. S. Department of Agriculture’s Office of the Inspector General.

The settlement agreement is neither an admission of liability by BAF, JBF, or GAIC, nor a concession by the United States that its claims are not well founded.

The Federal Crop Insurance Corp. was created by Congress in 1938 to help the agricultural industry recover from the combined effects of the Great Depression and the Dust Bowl. It established programs to protect farmers from crop losses. In 1996, the Risk Management Agency was established to administer the Federal Crop Insurance Corp. programs and other programs that support agriculture. The federal crop insurance program provides protection to farmers from unavoidable perils caused by adverse natural events.

Source: U.S. Attorney’s Office, District of Colorado.

Topics USA Fraud Agribusiness Colorado