WJTV News Channel 12 - Sen. Hagan amends farm bill to address crop fraud

Sen. Hagan amends farm bill to address crop fraud

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The Senate approved Hagan's amendment Thursday by a vote of 94-0. The Senate approved Hagan's amendment Thursday by a vote of 94-0.
RALEIGH, N.C. -

A measure championed by U.S. Sen. Kay Hagan adds $5 million in new funding to the 2013 farm bill to help root out crop insurance fraud.
    
The Senate approved Hagan's amendment Thursday by a vote of 94-0. The money will boost the U.S. Department of Agriculture's Risk Management Agency, which is responsible for policing the $120 billion taxpayer-supported program that insures farmers against losses from weather and pests.
    
The North Carolina Democrat introduced the measure after a federal probe discovered dozens of farmers in Eastern North Carolina, primarily in Wilson County, defrauded the federal crop insurance program for a staggering $100 million.

Forty-one defendants have either pleaded guilty or reached plea agreements after profiting from false claims on losses of tobacco, soybeans, wheat and corn.
    
"After the largest-ever crop insurance fraud ring was uncovered this year in North Carolina, many North Carolina farmers approached me with concerns that these bad actors, combined with federal budget woes, could mean the end of federal crop insurance," Hagan said Thursday. "I introduced this amendment to support fraud prevention to make sure these honest farmers don't pay the price for the actions of just a few."
    
The federal crop insurance program was created during the Dust Bowl of the 1930s as a way to keep farmers from going bankrupt because of a bad growing season. USDA pays about 15 private insurers to sell and manage the policies, but taxpayers are on the hook for most of the losses. Payouts for 2012 have topped $15.6 billion -- a figure that is still growing as new claims are filed.

But a number of Eastern North Carolina farmers, insurance agents, claims adjusters and brokers have cheated the system. Essentially, some filed claims of false losses to get insurance money and then sold the crops they had "hidden" from the government for more cash.

It took advantage of an insurance program that farmers find essential to balance their risk. Weaver, for example, said he pays about $40,000 a year in crop insurance.

Many of the dozens of defendants sentenced so far on fraud-related charges in North Carolina have received years in federal prison, agreeing to pay a total of $42 million in restitution and more than $900,000 in fines. That's still less than half the amount federal prosecutors say was bilked from taxpayers.
    
"By equipping the Risk Management Agency with the funds they need, we can more effectively combat fraud and abuse that wastes taxpayer dollars and jeopardizes critical support for North Carolina farmers," Hagan said.

The ongoing investigation has jarred Wilson, a tight-knit, and proud, county of only 81,000 people, with a county seat in the town of Wilson and an agricultural heritage in the surrounding rural area. Many in the county know people associated with the fraud cases and are reluctant to say much about their neighbors.

One local man spoke to WNCN outside a local farm supply company, but he didn't want to share his name. He said he knew two people involved in the federal investigation.

"I think they're really nice guys" he said. "I think the penalties were too heavy. I don't think the crime serves the penalty they got. They might have stepped over the line a little bit, but they're not really bad guys."

But the stakes were high for the farmers, and the cost to taxpayers ran deep into the millions. One crop insurance adjuster, Jimmy Sasser, was accused of making repeated threats and phone call to Mark Pridgen, who bought and sold hidden tobacco.

Documents show Sasser said he would "whip Pridgen's [expletive]" because Pridgen was cooperating with the government and "telling on everybody."

The records also say Sasser told one person that he carried a bat and knife in his truck and that he would "get" Pridgen.

Sasser could not be reached for comment. Pridgen, in a telephone interview, declined to comment.

Pridgen was ordered to pay more than $10 million in restitution in addition to his prison time. Sasser also went to prison and was ordered to pay more than $21 million in restitution.

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