The U.S. Department of Justice (DOJ) announced March 23 that Fireman's Fund Insurance Company has agreed to pay $44 million to settle allegations under the federal False Claims Act that it knowingly issued insurance policies that were ineligible under the U.S. Department of Agriculture's (USDA) federal crop insurance program and falsified documents. Fireman's Fund, an Allianz SE subsidiary headquartered in Novato, Calif., provides personal and commercial property insurance throughout the United States.
"Federal crop insurance provides vital support for farmers suffering crop losses due to natural disasters," said Acting Assistant Attorney General Benjamin C. Mizer of DOJ's Civil Division. "The Department of Justice will continue aggressively to pursue those who abuse this important program."
Between 1999 and 2002, Fireman's Fund operated a crop insurance business and participated in the federal crop insurance program. Under the program, Fireman's Fund sold and serviced crop insurance policies that were reinsured by the USDA for a portion of the risks.
DOJ alleged that between Jan. 1, 1999, and Dec. 31, 2002, Fireman's Fund "knowingly" issued federally reinsured crop insurance policies that were ineligible for federal reinsurance. According to the complaint, Fireman's Fund allegedly backdated policies, forged farmers' signatures, accepted late and altered documents, whited-out dates and signatures, and signed documents after relevant deadlines. The policies were issued by Fireman's Fund offices in Modesto, Calif.; Lambert, Miss.; Fargo, N.D.; Lubbock, Texas; Prosser, Wash.; and Overland Park, Kan.
"Today's announcement shows how working alongside our partners in law enforcement, we will ensure the integrity of the crop insurance program for American taxpayers and producers alike," said Risk Management Agency Administrator Brandon Willis of the USDA. The agency provides crop insurance policies and other risk management tools for farmers and the agriculture industry.
The settlement resulted from a coordinated investigation by DOJ's Civil Division, the U.S. Attorney's Office in the Western District of North Carolina and the USDA's Office of Inspector General, Office of Investigations, Office of General Counsel, and Risk Management Agency, including its Special Investigations Branch. DOJ cautions that "The claims settled by this agreement are allegations only, and there has been no determination of liability" on the part of Fireman's Fund. The company has declined to comment on the settlement.
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