Crop fraud farmers in six-figure settlement
by Insurance Business 15 Jun 2017
Julian Rigby, a Bacon County farmer, and Jasper Allen and Benjamin Swain, his sons-in-law, have agreed to pay the federal government $675,000 to settle a suit accusing them of creating false crop insurance claims.
Rigby will pay the most at $350,000, while Allen and Swain will pay $300,000 and $25,000, respectively, to settle their involvement in concealing Rigby’s role in farms they claimed to operate, and in collecting crop insurance for him.
The case is the first recovery through the US Department of Agriculture’s crop insurance program in the southern district of Georgia under the federal False Claims Act, the US Attorney’s Office said in an article published on Jacksonville.com.
The federal government claimed that the trifecta of Bacon County farmers operated a scheme in which Allen and Swain provided losses claims under the federal crop insurance program. Under the regulations governing the program, only landlords, owner-operators or tenants are qualified for crop insurance coverage and, over two years, the two men are alleged to have fabricated claims in which they stated 100% of the losses.
The complaint states that the two men have no financial risks as Rigby paid them salaries, provided the land and equipment, paid all the workers, provided a barn to cure tobacco, financed all purchases and made all the decisions. In addition, farm expenses of more than $1 million were billed to Rigby or to Alma Bright Leaf in 2008, 2009, and 2010. In addition, it states that Rigby issued many claims and harvested more than $2.9 million in crop insurance payments for 13 years.
The scheme triggered the federal crop insurance program to issue checks ranging from $74,121 to $262,105 to Swain and Allen who allegedly passed the money along to Rigby. The trio were also accused of failing to return some overpayment from the insurance program.
FOR IMMEDIATE RELEASE
Wednesday, June 14, 2017
South Georgia Farmers to Pay Up To $675,000 to Resolve False Claims Act Suit
SAVANNAH, GA: Bacon County (Georgia) farmers Julian Rigby, Jasper Allen and Benjamin Swain, as well as several entities owned by Rigby, agreed to pay up to $675,000 to resolve allegations that they violated and conspired to violate the False Claims Act. This settlement is the first False Claims Act recovery involving the United States Department of Agriculture’s crop insurance program in the history of the Southern District of Georgia.
This settlement resulted from an investigation initiated by the United States Department of Agriculture (“USDA”). On July 1, 2016, the United States filed an action in the United States District Court for the Southern District of Georgia captioned United States of America v. Julian Rigby, et al., 5:16-CV-53. In its complaint, the United States contended that Rigby, Allen, and Swain misrepresented and conspired to misrepresent the individuals who had an insured interest in an attempt to obtain more favorable coverage. The United States also alleged that, after filing a claim for losses they supposedly suffered, Rigby, Allen, and Swain submitted and conspired to submit false and fraudulent documents to the USDA to ensure payment.
Acting United States Attorney James D. Durham said, “The federal crop insurance program serves an important role supporting farmers who suffer crop losses due to natural disasters. This United States Attorney’s Office will root out anyone who seeks to manipulate the crop insurance program for personal gain.”
“Today’s announcement shows how, working alongside our partners in the Department of Justice, we will ensure the integrity of the crop insurance program for American taxpayers and producers alike,” said Heather Manzano, Acting Administrator for USDA’s Risk Management Agency.
The claims resolved by this settlement are allegations only; there has been no determination of liability. The case was investigated by USDA- Risk Management Agency Investigator Randy Upton, Special Agents Andrew Ridgeway and Robin Wilcox of USDA-Office of the Inspector General, and Law Clerk Alison Slagowitz of the United States Attorney’s Office, Southern District of Georgia. The United States was represented by Assistant United States Attorney J. Thomas Clarkson. For questions, please call the United States Attorney’s Office at (912) 201-2522.