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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