Farmers to Pay $6.5 Million After Whistleblower Alleges They Defrauded Crop Insurance Programs

Crop Insurance Whistleblower

On February 29, the United States District Attorney of Colorado, Cole Finegan, announced that two Colorado farmers, Patrick Esch and Ed Dean Jagers, have reached a $6.5 million settlement to resolve claims brought under the qui tam provision of the False Claims Act (FCA). A qui tam whistleblower initiated a federal investigation that unveiled that the two defendants allegedly defrauded federal crop insurance programs by interfering with rain gauges.

The FCA’s qui tam provisions incite private citizens to file a civil lawsuit on behalf of the federal government — whistleblowers are a vital component in policing fraudulent enterprises. Since the qui tam provisions were modernized in 1986, the FCA recovered more than $70 billion from fraudsters and paid out more than $7.3 billion in whistleblower rewards. In this case the whistleblower is set to receive $500,000

The United States Department of Agriculture (USDA) aids farmers and ranchers by supplying indemnity for crop insurance programs. These programs ensure compensation for damages and losses when less precipitation occurs in the region. Mr. Esch and Mr. Jagers were allegedly hindering and impairing the function of rain gauges to prevent accurate rainfall measurements. The interagency investigation revealed that they allegedly tampered with various rain gauges, some belonging to the National Oceanic and Atmospheric Administration, like filling gauges with silicone to interpret the collection of moisture, cutting the wires, and overturning buckets of precipitation to make the impression that the rainfall has reduced significantly.

Finegan states, “Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused.” He continues, “This case also shows the full measure of justice that can be achieved when our office uses both civil and criminal tools to protect vital government programs.”

Jeffrey Lysaght of the U.S. Department of Commerce OIG adds, “The Department of Commerce OIG is dedicated to working with the Department of Justice and our law enforcement partners to curb fraud, waste, and abuse. We continue to vigorously investigate those individuals who seek to compromise the integrity of National Weather Service equipment and data in an effort to defraud the Federal Government.”

On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.

“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”

Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reformsNational Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.

Join NWC in Taking Action:

Demand that Congress strengthen the False Claims Act

Further Reading:

Two Southeastern Colorado Farmers Sentenced to Federal Prison and Will Pay Over $6.5 Million for Defrauding Federal Crop Insurance Programs

Bipartisan Legislation Unveiled to Strengthen False Claims Act

More False Claims Act Whistleblower News

Exit mobile version