As Congress is debating future funding for the crop insurance program, news comes of several major fraud cases involving crop insurance. A government investigation uncovered a $100 million scheme by dozens of North Carolina crop insurance agents, adjusters, brokers and farmers to defraud the program. Forty-one defendants have either pleaded guilty or reached plea deals after profiting from false claims for losses of soybeans, wheat, corn, and tobacco. RMA Administrator Brandon Willis says the probe by RMA, the IRS, and the Justice Department is the biggest case of fraud in the history of the crop insurance program, “There were two judgments rendered, one for $21 million and another for $8 million.” The North Carolina scheme involved crops that weren’t damaged at all and farmers using aliases to sell their written-off harvests for cash. Willis says crop insurance fraud is not a victimless crime and that premiums go up when this happens, which is why most farmers play by the rules.
He said this investigation shows that the program works and that fraud and abuse can be monitored. He stated this case should send a positive message to Congress, not a negative one, “The lesson from these investigations is that crime does not pay in the crop insurance program. This sends a positive message that we will not tolerate fraud.” Farmers paid close to $29 billion in premiums over the last decade. Things flipped last year with the historic drought. Farmers received nearly $15.5 billion through March 4th on their $4 billion plus in premiums. Willis says this is far less money than Congress used to dole out under ad hoc disaster bills.