Federal investigators have uncovered the largest crop insurance fraud ring in the country in eastern North Carolina. The scheme involves dozens of agents, claims adjusters, brokers and farmers, who have stolen an estimated $100 million, the AP reported.
Forty-one defendants have either pleaded guilty or reached a plea agreement between 2005 and 2010. False insurance claims for tobacco, soybean, wheat and corn losses were filed by farmers using aliases. In cases where crops were not damaged at all, farmers profited directly from sales of written-off harvests.
Authorities discovered the ring in 2005 after using computer software to mine insurance claims data across the country. Investigators found an outlier in Robert Carl Stokes, a Wilson, W. Va., crop insurance agent whose clients seemed to have consistent bad luck.
Stokes recruited farmers to take out large policies, claim large losses, and hide the true value of their crops by selling them to tobacco warehouse operators in on the scheme. During the prosecution of Stokes and his co-conspirators, dozens of other frauds were uncovered.
Stokes was charged with 14 felony counts and pled guilty in 2010. In early 2011, he was sentenced to 30 months in prison and agreed to pay more than $16.5 million in restitution. Since his trial, dozens of other defendants have been sentenced to jail time and ordered to pay a total of $42 million in restitution—half of what prosecutors say taxpayers are owed, the AP reported.
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