Tobacco Farmers Guilty of Crop Insurance Fraud
BOWLING GREEN, Ky. – Two Allen County, Kentucky, farmers pleaded guilty in United States District Court today, before Magistrate Judge H. Brent Brennenstuhl, to a single charge each of crop insurance fraud announced United States Attorney John E. Kuhn, Jr.
As shown in his plea agreement, one of the farmers, Henry Manion, submitted fraudulent claims on two crop insurance policies in Macon County, Tennessee, in 2009 and 2010 (See the chart accompanying this story for loss amounts).
According to their separate plea agreements, David Manion, 53, and Henry Manion, 48, aided and abetted by others, admitted to knowingly making false statements and reports on applications for insurance. Both defendants made false statements for the purpose of influencing the actions (insurance payments) of the Federal Crop Insurance Corporation (FCIC) and Producers Agriculture Insurance Company (ProAg), a company insured by the Federal Crop Insurance Corporation. Additionally, David Manion had crop insurance provided by Rural Community Insurance Services (RCIS), a company insured by the Federal Crop Insurance Corporation (FCIC).
The violations by Henry Manion occurred between August 10, 2009, and February 14, 2012, in Allen and Simpson Counties in Kentucky and Macon County, Tennessee. The violations by David Manion occurred between August 25, 2009, and February 7, 2012, in Allen, Simpson and Warren Counties in the Western District of Kentucky. At all relevant times, their tobacco crops were covered by companies insured by the FCIC.
According to the plea agreement, David Manion had eight (8) separate tobacco crop insurance policies on eight (8) different crops. David Manion, aided and abetted by others, admitted to intentionally overstating crop damage for each crop on a crop insurance claim, resulting in a loss of $1,133,498.
According to a separate plea agreement, Henry Manion had five (5) separate tobacco crop insurance policies on five (5) different crops. Henry Manion, aided and abetted by others, admitted to intentionally overstating crop damage for each crop on a crop insurance claim form, resulting in a loss of $1,104,087.
According to the terms of the plea agreements, at sentencing the United States agrees to recommend a sentence for both defendants at the lowest end of the sentencing guideline range and each defendant will be required to make full restitution to the FCIC. If convicted at trial, Henry Manion and David Manion each faced a maximum prison term of 30 years and a maximum fine of $1,000,000.
The plea agreement also requires the voluntary exclusion of both defendants from any USDA farm programs administered by the Risk Management Agency and the Farm Service Agency for a period of five years from the date of plea agreement. The same paragraph in each of their plea agreement also states:
16. This exclusion will apply to the defendant as well as any corporations, partnerships, or other entities by which the defendant would directly or indirectly receive benefits. The Defendant further agrees that during the exclusion period he shall not participate in or earn any income or any other benefit from the Federal Crop Insurance Program or the Farm Service Agency. For purposes of this Plea Agreement, the term “Federal Crop Insurance Program” shall only refer to the business or policies written under the Federal Crop Insurance Act. Defendant will, however, be permitted to report acreage and production to these agencies for crops grown.
Sentencing is scheduled before U.S. District Judge Stivers on December 5, 2016 at 10:00 a.m. in Bowling Green, Kentucky.
These cases are being prosecuted by Assistant United States Attorney David Weiser and are being investigated by the United States Department of Agriculture (USDA) Office of Inspector General (OIG).
