One Potato, Two Potato, Three Potato, Fraud

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46327766 - concept for corruption, bankruptcy court, bail, crime, bribing, fraud, auction bidding. judges or auctioneer gavel, soundboard and bundle of dollar cash on the rough wooden textured table background.

Farmers can buy insurance to protect themselves in case they lose their crops to natural disasters such as floods, drought or hail. It also covers policy holders if prices for agricultural commodities decline and revenue drops. An article posted on ValleyNewsLive.com tells about two brothers who sabotaged their own potato crops in order to collect millions of dollars in federal assistance.

The story states that the siblings intentionally destroyed and damaged some of their potato crops in the field as well as in storage in order to gain federal crop insurance payments and disaster benefits over many years. Some of their methods of destruction included applying fertilizer and septic system products to their seeds prior to planting; using cultivator equipment to destroy their growing potato plants; and, intentionally leaving potatoes behind in the fields during harvest time.

The brothers also damaged their stored crops by spraying septic system products directly on the potatoes. To deceive the government into thinking they were properly caring for their crops, they purchased farm chemicals that were intended to protect them from disease. (They resold the products without ever using them.) They even sprayed water on their fields to make it look like they were really taking care of the crops. They also added frozen potatoes to the top of their stored pile, then raised the temperature in the warehouse to cause the potatoes to rot. (Wouldn’t it have been easier just to legitimately raise and sell their potatoes?)

The two farmers were convicted by jury for intentionally destroying their crops in order to receive millions of dollars in federal crop insurance indemnities, subsidized crop insurance premiums and federal disaster benefits. They both face up to 30 years in prison plus millions in fines, restitution and criminal forfeiture.

The government intended crop insurance to help farmers who legitimately deserved benefits because their crops were destroyed by natural causes, not by their own hands. This case is a perfect example of ”you reap what you sow.” (Regardless of whether you say ”potato” or ”patattah,” everyone can pretty much agree that these two deserve the punishment they are going to receive.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”2 ND Potato Farmers Convicted of Crop Insurance Fraud,” written by Lisa Budeau and posted on ValleyNewsLive.com on December 12, 2014.

Two potato farming brothers have been convicted of crop insurance fraud in North Dakota Federal Court.

Jury members unanimously found Aaron and Derek Johnson guilty of intentionally destroying some of their crops in order to get unfair gains in crop insurance and federal disaster payments.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.