A Colorado couple that owned two farms thought that cheating the system would be easy—sell some crops and claim that they were ruined by that summer's weather. However, when the insurance policy is taken out just months before the supposed loss and the crops lost had no commercial value, things may start to look a little rotten.

In February of 2004, both Bigelow Associated Farms (BAF) and J.B. Farms (JBF), owned by husband and wife potato farmers Donald Boyd Bigelow and Janet Kerkman Bigelow, purchased crop insurance from Great American Insurance Company (GAIC). Later that year, the couple filed claims with GAIC citing weather-related losses; the two claimed they lost all of their “zero value production” potatoes, or those without any commercial value.

The Bigelows, however, had in fact sold some of those potatoes, as discovered through investigation by the United States Department of Agriculture's Office of the Inspector General with assistance from RMA's Central Region Compliance Office. Not all of their crops had been destroyed as detailed in the claim.

GAIC had already made indemnity payments, including $270,607 to BAF and $307,982 to JBF, for crop losses. The insurer, however, had not followed proper policy and procedure; the claims had not been adjusted correctly.

The U.S. Department of Agriculture, Federal Crop Insurance Corporation (FCIC), and the Risk Management Agency (RMA) had all contributed to GAIC's reimbursement. The FCIC was created by Congress, and the RMA was established to administer the FCIC. In essence, the U.S. overpaid GAIC.

As of late July, the Bigelows have repaid the U.S. $66,000 and GAIC has paid $65,000.

Special Reports /

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