From the tractor
by Agriculture Commissioner Steve Troxler
In recent months, I've read several news stories about North Carolina farmers, insurance agents and claims adjusters being sentenced to prison for crop insurance fraud.
In one case, a convicted former insurance adjuster from Wilson was sentenced to four years in prison for a variety of charges related to filing false insurance claims. His sentence would have been longer had he not cooperated with investigators. He also was ordered to pay $21 million in restitution.
In another case, a Mebane insurance agent was sentenced to nine years in prison and ordered to pay $8.4 million in restitution, which is the amount prosecutors contended he received in fraudulent federal crop insurance payments. A farmer involved in the case was sentenced to one day in prison and six months of house arrest. He also had to pay $63,000 in restitution and fines.
Turns out, these cases were just the tip of a much bigger problem. The federal government has been investigating a scheme involving dozens of insurance agents, adjusters, farmers and others. They are accused of stealing at least $100 million from the federal crop insurance program. This is an embarrassment to the state of North Carolina and to all our honest farmers.
These stories should serve as a cautionary tale. Crop insurance is a useful safety net that provides growers with a measure of protection against damage from weather and pests. But claims should be filed only when there is a legitimate need.
No one should file false claims for crops that were in fact harvested and sold. It's against the law, and it's pretty obvious that prosecutors are serious about making examples of individuals who commit these crimes. As Thomas Walker, U.S. attorney for the Eastern District of North Carolina, told The Associated Press: "We aggressively pursue these criminals just like we pursue drug dealers and other crooks."
There are other reasons to play by the rules. Fraud is harmful to the crop insurance system and the farmers who pay premiums into it. It also harms taxpayers, who end up paying most of the losses. Cases like the ones I mentioned give critics of the crop insurance program plenty of ammunition to use in pushing for its elimination.
There's no doubt that farmers face financial challenges. The cost of land, equipment, fertilizer and other inputs is volatile, commodity prices fluctuate, and credit can get tight. These pressures, coupled with difficulties in finding fraud, may tempt growers to break the law. Don't do it. You'll likely end up losing a lot more than a crop. It could cost you your freedom and your farm.