Two Farmers Indicted in Kentucky Crop Insurance Fraud

Two Kentucky farmers and a relative have been indicted for falsifying crop injury and exaggerating the dimensions of their fields so as to reap crop insurance coverage advantages.

A federal grand jury final week charged Randall Taulbee and James McDonald, of Bourbon and Nicolas counties, close to Lexington, with a multi-year scheme to defraud the Federal Crop Insurance coverage Corp. and firms that the FCIC reinsures. ARMTech Insurance coverage Providers, now a part of Sompo Worldwide, paid out on among the insurance policies.

Additionally indicted was Cherie Lynn Noble, the sister of Taulbee and sister-in-law of McDonald, whom prosecutors mentioned conspired within the fraud and made false statements to a federal investigator.

“It was the aim of the conspiracy to revenue or to keep away from oversight by way of misrepresenting shares on crop insurance coverage insurance policies and underreporting crop manufacturing,” reads the indictment within the U.S. District Courtroom for the Jap District of Kentucky.

Kentucky has seen its share of crop insurance coverage fraud in the previous couple of years. In January of 2022, an impartial adjuster who helped tobacco farmers file thousands and thousands of {dollars} in fraudulent claims was sentenced to a few years in jail. Greater than three dozen individuals, together with an insurance coverage agent, have been charged within the scheme, and at the very least 20 have been convicted, based on information experiences.

Federal prosecutors have known as the fraud “pervasive and extreme” in that a part of Kentucky. A spokeswoman for the U.S. Legal professional’s workplace mentioned Wednesday that she couldn’t say if the Taulbee and McDonald indictments are associated to the opposite investigations lately, or if extra arrests are imminent.

The fraud scheme labored like this, based on the indictment: Taulbee and McDonald owned and rented farmland and obtained crop insurance coverage on tobacco and corn, beginning in 2009. In 2013, Taulbee licensed that he was a brand new producer, which allowed larger insurance coverage advantages. Over the subsequent two years, he overreported the acreage he had insured, and submitted false data on provides.

In 2014 to 2016, McDonald overreported the tobacco acreage on his farmland, falsely claimed hail injury, and submitted false data on bought farm provides, the indictment reads.

Corn was additionally offered underneath James McDonald’ son’s identify, however the proceeds had been truly break up between the 2 farmers, prosecutors alleged. The manufacturing was not reported, leading to a bigger indemnity payout from the crop insurance coverage. The boys additionally break up bills and income, however on insurance coverage insurance policies every claimed 100% possession of the crops, the indictment notes.

In 2014, ARMTech Insurance coverage paid McDonald greater than $129,000 and paid Taulbee greater than $76,000. Sompo Worldwide couldn’t be reached for remark Wednesday morning.

In 2015 and 2016, Noble obtained crop insurance coverage on tobacco in Bourbon County and filed a hail-loss declare. However she didn’t personal the crop, and gave the $179,500 in insurance coverage proceeds to Taulbee and McDonald, prosecutors mentioned.

When a U.S. Division of Agriculture inspector questioned Noble, she claimed she was not associated to her brother and that she, not the lads, farmed the tobacco crop.

Prosecutors are asking that Taulbee repay some $182,000; that McDonald pay greater than $207,000; and that Noble return about $3,000. If convicted of the fraud, the three might additionally face greater than 30 years in jail and greater than $1 million in fines.

Subjects
Fraud
Agribusiness
Numbers
Kentucky