Crop insurance fraud
There`s apparently a common practice of what they call "acreage shifting" where a farmer has a little above APH yield on a few farms and a little below on others and then reports bushels in a way that he collects off of every farm. I don`t know how they get busted, unless an adjuster was looking over their shoulder as they harvested, perhaps yield monitor info downloaded into the "cloud" and that busted him?
I have "enterprise units" to get a cheaper premium which would not make that cheating possible. That`s probably why enterprise units are cheaper, because of a little less fraud potential.
But this acreage shifting has been a pretty much open secret around to the point you are called a fool for not doing it. One guy collects on crop insurance every year and this is a area of usually very good yields. One highroller bought crop insurance from the agency that his wife worked and they scammed the insurance company. But they claimed they were both koo koo and checked themselves in the nuthouse, now it`s business as usual buyin` and rentin` land and machinery and all kinds of swell stuff like nothing happened. I guess if you think you`re in trouble, check yourself in the nuthouse and you get by.
According to the DOJ, in 2014, Campbell obtained crop insurance for two farms from an insurance company that was insured by the Federal Crop Insurance Corporation, which is a government corporation.
“The Federal Crop Insurance Corporation reimburses insurance companies for the payments made to policyholders under the Federal Reinsured Crop Program”
The DOJ says, Campbell, “crop shifted”. Crop shifting occurs when a farmer underreports production in one field in order to reach the percentage of loss required to receive an insurance payout from their crop insurance policy.
Campbell “shifted” production from one farm he owned to another by reporting that several thousand bushels of grain were harvested from one farm when he knew that those bushels were actually harvested from his other farm.
According to the DOJ Campbell also hid production by not reporting to the USDA or Federal Crop Insurance Corporation several thousand bushels of corn sold in his son’s name. He then received insurance payments fraudulently.
As a result, Campbell has been sentenced to:
Re: Crop insurance fraud
When guys like that cheat the system, the rest of us pay for it. How guys like that get caught ranges from the most basic to high-tech.
Basic red flags (not necessarily proof that anything nefarious is happening, but it raises questions) -- having a loss when nobody else has a loss -- having losses multiple years when others don't -- providing only scale tickets without summary/settlement sheets (or changing the info at the elevator so it doesn't match the original scale ticket) -- delivering grain in shares that are inconsistent with how the farm is rented -- delivering loads of grain from distant farms in questionable/illogical or mixed order -- using custom harvesters with no proof of cash payment -- using custom haulers with no proof of cash payment -- unreported grain sales in names of wife/kids, landlords, custom operators, suppliers, etc -- reported grain production inconsistent with area -- reported grain production inconsistent with yield maps -- obviously providing only partial information or mixed information sources -- farming some ground that is not reported to FSA when other ground is reported -- and so on.
On the other end of the spectrum -- it is amazing what the feds can figure out from "data mining" and satellite info -- comparing what is reported on crop insurance versus what is reported to other USDA entities, for example -- and they're not sitting there watching a guy via satellite, but they can certainly gather a lot of data from those flyovers to assemble and review for various purposes. If necessary, the feds can prove when you were in the field planting or harvesting, including what dates you were performing activities in each field or location. For a basic idea how this works, just look at the detail you can see in Google Earth sometime.
Re: Crop insurance fraud
There`s at least 5 different yields, what their uncalibrated yield monitor says, what they report to the crop insurance agent, what they say at the coffee shop, what they tell their landlord and finally the bushels they get paid for.
It`s good they`re finally cracking down on cheats, but the punishment is less than planting saved gmo seed and about the same as using red diesel in your pickup. I mean the guy in the story was fined $40,000 or, how many years has he done it before finally getting caught?