RALEIGH, NC. Feb. 20, 2013 – Two recent court cases, involving crop insurance adjusters, agents and tobacco farmers, indicate that federal courts are doing more to crack down on sometimes elaborate schemes to collect millions in fraudulent crop insurance payouts.
In the Eastern District of North Carolina, Chief United States District Judge James C. Dever III, sentenced Jimmy Thomas Sasser, 61, to 48 months imprisonment followed by 3 years supervised release and restitution of $21,045,917. The sentence reflected a reduction for Sasser’s cooperation in the on-going investigation.
“Today’s sentence reflects the harm committed on our community as a result of this massive multi-million dollar fraud scheme and should serve as a deterrent for adjusters who are contemplating taking pay-offs to help farmers and agents file false claims,” noted U.S. Attorney Thomas G. Walker.
According to the Criminal Information and information provided in open court, Sasser, a crop insurance adjuster for Rural Community Insurance Services (RCIS), received cash pay-offs from 1996 through 2007 to falsify claims regarding the scope of damage or the farmer’s true tobacco production on a particular acreage.
The scheme consisted of adjusters, including Sasser, who would submit a false assessment of loss on a Proof of Loss form, which was mailed or wired to the insurance company. The co-conspiring insurance agent would collect pay-offs for the inflated loss adjustments from the co-conspiring farms and would share the monies with the adjusters, including Sasser.
During the course of the investigation, Sasser lied to federal law enforcement officers, according to court documents. Sasser also sent a letter to the North Carolina Department of Insurance in November 2010, falsely denying having received money from Robert Carl Stokes. Stokes, an insurance agent from Wilson, North Carolina, previously pled guilty to charges in connection with the on-going crop insurance fraud investigation.
“Adjusters play an important role when adjusting claims for producers. The sentencing of an insurance adjuster in this case should serve as a strong deterrent to those who chose to commit fraud against the federal crop insurance program and will help protect the integrity of this program by ensuring that taxpayer dollars are safeguarded,” stated Karen Citizen-Wilcox, Special Agent-in-Charge of the Southeast Region, USDA-OIG-Investigations.
Sasser was sentenced just one week after Judge Dever III sentenced an insurance agent and a farmer for their parts in a widespread tobacco crop fraud. In that case, William Larry Rogers, 69, an insurance agent, was sentenced to a total of 108 months imprisonment followed by 3 years supervised release. Rogers was also ordered to pay restitution in the amount of $8,381,378. Both defendants are from Mebane, North Carolina.
Richard Enoch, 68, a farmer who filed false claims in 2006 and 2008, received 1 day imprisonment followed by 5 years supervised release and 6 months house arrest. Enoch was also ordered to pay restitution in the amount of $58,672.00 and a fine in the amount of $5,000.
According to the Criminal Information and information presented in open court, Enoch was a tobacco farmer in Alamance County and Rogers was his insurance agent
Rogers owned and operated W.L. Rogers Farm, LLC, and also worked as an insurance agent with Triangle Insurance Group, Inc. As an insurance agent, Rogers sold, among other things, multi-peril crop insurance and private crop-hail policies for various crops including tobacco. As a result of his agency relationship with insurance companies servicing federal crop insurance policies, Rogers was required to submit annual conflict of interest forms.
From September 2005 through September 2011, Rogers conspired with others to commit fraud upon the federal crop insurance program and private crop hail programs, and to obstruct the federal investigation of the fraud, the court found.
Rogers, on behalf of W.L. Rogers Farms, LLC, entered into a contract with Phillip Morris for the sale of tobacco each year from 2005 through 2011, but would take tobacco production from co-conspiring farmers and sell that tobacco on the W.L. Rogers Farms, LLC contract. As a result, the farmers were able to hide some or all of their tobacco production. Thereafter, the farmers, with the knowledge and assistance of Rogers, filed false crop insurance claims.
Additionally, Rogers helped his farmers pay bribes to loss adjusters who, in turn, inflated the extent of damage to tobacco crops. Loss adjusters submitted the inflated claims to the insurance companies and farmers received monies on false claims.
In 2006, and then again in 2008, Enoch sold tobacco through Rogers but failed to disclose such tobacco in production reports in connection with his claims for indemnity payments. As a result of his false claims, Enoch obtained $58,672 in indemnity payments to which he was not entitled. On March 23, 2011, Enoch lied to federal law enforcement officers and denied selling hidden tobacco through Rogers.
In addition to helping farmers commit federal crop insurance fraud, Rogers lied on conflict of interest forms. Annually from October 2005, through August 2010, Rogers denied and failed to disclose business relationships with his insureds, including that he was, among other things: buying and selling tobacco with and through his insureds; selling gas and fertilizer to his insureds; loaning equipment to his insureds; and employing an insured as a contract employee.
The criminal investigation of this case was conducted by United States Department of Agriculture – Office of the Inspector General – Investigations, the United States Department of Agriculture - Risk Management Agency – Special Investigations Branch, and the Internal Revenue Service - Criminal Investigation. Assistant United States Attorney Banumathi Rangarajan handled the prosecution on behalf of the Eastern District of North Carolina.
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