Crop insurance fraud harms not only other farmers, but also all Americans who pay into the taxpayer-funded federal system. The Federal Crop Insurance Program was created to provide affordable insurance options to American farmers. When companies and individuals submit false claims about crop loss in order to recover payments for uninsured land, or promote fraudulent insurance policies to farmers, they cheat the entire system. You can fight back by becoming a crop insurance fraud whistleblower, and earn yourself a financial reward in the process.
To speak up about crop insurance fraud, contact the whistleblower lawyers at Tycko & Zavareei LLP today for a free and confidential consultation.
Federal Crop Insurance Program
The Federal Crop Insurance Program (FCIP) is a mechanism by which many American farmers insure their crops today. Crop insurance insulates the American economy against supply shocks for vital agriculture. It protects American farmers from price gouging by private insurers, as well as helps provide a safety net against extreme weather and unforeseen economic events.
Background of the Federal Crop Insurance Program
In 1938, Congress created the Federal Crop Insurance Program in an effort to make insurance more affordable in the agriculture sector. The Federal Crop Insurance Corporation (FCIC) was established under the jurisdiction of the United States Department of Agriculture (USDA).
In 1980, the FCIP was greatly expanded by the passage of the Federal Crop Insurance Act (FCIA) (P.L. 96-365). The FCIA increased what kinds of crops and commodities could be considered eligible for coverage. It also authorized private insurance companies to offer crop insurance that could be backed by the FCIP.
Administration of Federal Crop Insurance Today
The FCIP offers insurance coverage that protects over 100 different commodities under varying policy plans, depending on the kind of crop, state, region, and other factors. The USDA administers the Federal Crop Insurance Program as well as provides oversight through the FCIC and Risk Management Agency (RMA) for private crop insurance policies issued by Approved Insurance Providers (AIPs).
In general, the Federal Crop Insurance Corporation (FCIC) works to “carry out the purposes” of Congress’s intent in passing the FCIA. Its main goal is to “promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance.”
What is Federal Crop Insurance Fraud?
Due to the passage of the FCIA in 1980, crop insurance largely involves reinsurance, or payments made to AIPs who report that farmers have claimed a loss on their private insurance. Crop insurance policies are usually divided into two categories: revenue loss and yield loss. Revenue loss policies provide insurance against lost earnings due to market shifts such as overall price declines. Yield loss insurance coverage, on the other hand, is based on an assessment of average crop production history by the farmer. It is structured to protect against crop production loss due to events like severe weather.
Not all losses are covered by the FCIP, however. Attempts to claim certain losses as covered that should not be are an example of crop insurance fraud. For instance, losses due to producer “neglect or malfeasance” or failure “to follow good farming practices” are not considered covered by FCIP reimbursements. Additionally, private insurers may perpetrate fraud by falsely certifying for payments from the FCIC, or failing to follow RMA guidelines.
Identifying Crop Insurance Fraud
Federal crop insurance fraud can be difficult to spot because of the tiered system of reimbursements and subsidies. Because of this, whistleblowers can receive financial rewards when they report crop insurance fraud that would otherwise go undetected.
The following are some examples of crop insurance fraud that may be reportable to a crop insurance fraud attorney:
- Understating crop yields to claim FCIC reimbursement payments
- Claiming unplanted crops as losses
- Shifts from non-insured to insured land for the purpose of an insurance claim
- Backdating insurance policies for FCIC reimbursements, or otherwise fabricating documentation
- Collecting payments made for unqualified crop insurance programs
How to Report Crop Insurance Fraud
Crop insurance fraud ultimately hurts taxpayers. A crop insurance fraud whistleblower can make the system work better for everyone involved by reporting what they know, while earning themselves a percentage of the overall recovery.
Making false claims to federal government programs is illegal under the False Claims Act. A crop insurance fraud lawyer can help you build and file your case under this federal qui tam statute and help you receive anywhere from 15 to 30% of an overall successful settlement. Because False Claims Act cases are assessed at a rate of treble damages per false submission, the overall settlement may value much higher than the initial false claim, earning you a high reward as a whistleblower.
To report fraud, contact a whistleblower lawyer. There are certain rules and regulations that must be followed when reporting crop insurance fraud in order to receive a reward:
- The information must be previously unreported. Do not share your suspicions publicly if you wish to file your claim. While more than one whistleblower can earn themselves a relator share, they must file jointly in order to avoid negating the award for the other party.
- The claim must be filed within the statute of limitations, and in the proper jurisdiction in order to qualify for a reward. A crop insurance fraud whistleblower lawyer can help you ensure that the details of your claim will qualify you for a possible reward.
Notable Crop Insurance Fraud Cases
The following are examples of notable crop insurance fraud settlements:
- Fireman’s Fund Insurance Company: The 2015 settlement with Fireman’s Fund Insurance Company remains one of the largest crop insurance cases on record. Fireman’s Fund paid $44 million to settle allegations that they knowingly offered crop insurance policies that were ineligible for reimbursement with the FCIP under USDA guidelines. Fireman’s Fund employees were allegedly ordered to backdate policies, forge farmers’ signatures, white-out disqualifying information, and sign and accept late documentation. The far-reaching fraud was found to affect policies in California, Mississippi, North Dakota,Texas, Washington, and Kansas.
- G. Lincoln Farms, LLC: A $1,200,000 settlement out of Michigan in 2022 arose out of allegations that G. Lincoln Farms violated the False Claims Act by submitting false claims for reimbursement under the FCIP. The company was accused of placing farmland and crops under the names of employees who did not have a financial stake in them. The employees were then enrolled in FSA benefit programs and federal crop insurance policies, so that payments could be funneled back to their employers. This system resulted in ineligible crop insurance payments being issued to the farmers.
How a Crop Insurance Fraud Lawyer Can Help
If you know about insurance fraud involving repayments from the FCIC, you may be able to claim a crop insurance fraud whistleblower reward by filing a crop insurance fraud lawsuit. Many people do not realize that federal qui tam law allows whistleblowers to recover as high as 30% of a successful settlement in a fraud case filed on behalf of the federal government. Your crop insurance fraud lawyer can help you remain anonymous throughout the reporting process, advise you about what kinds of information and proof are necessary for your case, cooperate with USDA investigators, and help you claim a possible reward.
Contact a Crop Insurance Fraud Lawyer
If you know about crop insurance fraud, report it. Doing so can save thousands to millions of dollars that you and other average Americans pay into the system to help keep crop insurance affordable. It can also earn you a significant financial reward. Speaking up is the right thing to do, and a crop insurance fraud lawyer can help you file your claim and ensure that you receive appropriate whistleblower protections and your settlement amount.