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A Warsaw, Indiana-based crop insurance coverage firm has reached a settlement with the U.S. lawyer’s workplace in western Michigan, agreeing to pay $500,000 to resolve allegations the corporate violated federal regulation by submitting fraudulent crop insurance coverage claims for a Michigan farmer now going through fees.
Silveus Insurance coverage Group Inc. and its CEO, James Cameron Silveus additionally agreed to a one-year monitoring interval with USDA’s Threat Administration Company in reference to a crop insurance coverage fraud case filed in opposition to Gaylord Lincoln. Lincoln farms in 4 south-central Michigan counties.
The corporate additionally agreed to a voluntary exclusion from federal packages by means of March 1, 2023, based on a information launch from the U.S. lawyer’s workplace.
At present, the case in opposition to Lincoln is pending within the U.S. District Court docket for the District of Western Michigan, the place the U.S. lawyer’s workplace filed a grievance.
The U.S. contends Silveus, by means of Silveus Insurance coverage Group, served because the crop insurance coverage agent for Lincoln, who farmed crops in Calhoun, Eaton, Ingham and Jackson counties in Michigan.
In December 2021, the U.S. filed a grievance alleging Lincoln violated the False Claims Act by sustaining a “scheme to fraudulently receive extra federal farm profit program funds than he was entitled to obtain,” based on the U.S. lawyer’s workplace.
The U.S. lawyer alleged Silveus and Silveus Insurance coverage Group, performing on the course of Lincoln, “obtained federal crop insurance coverage insurance policies for these straw farming operators, and that Mr. Silveus and Silveus Insurance coverage Group prompted the submission of false claims for the straw farming operators who had no insurable curiosity within the insured crops below their names.
“Because of these false claims, the federal authorities, by means of the Federal Crop Insurance coverage Company, paid subsidy premiums and indemnities on these false insurance policies, in addition to administrative prices that had been paid to Mr. Silveus and Silveus Insurance coverage Group,” the information launch stated.
THE LAWSUIT
The U.S. lawyer’s workplace alleges within the lawsuit that Lincoln financed a community of so-called “straw lessees” to assist circumvent USDA advantages limits set on farms from 2010 to 2019.
Every of the lessees, based on the grievance, would declare to be a producer enrolling in varied crop advantages packages.
“To take action, Lincoln parsed his substantial farmland holdings to a bunch of straw operators who, at Lincoln’s course, knowingly submitted false and fraudulent paperwork to enroll in USDA packages,” the lawsuit alleges.
“By falsely claiming Lincoln’s crops as their very own, these straw lessees fraudulently obtained USDA profit funds that they funneled to Lincoln for his private profit. Lincoln additionally directed his community of straw farming operators to falsify paperwork and fraudulently receive crop insurance coverage insurance policies that had been partially backed by the federal authorities.”
The grievance stated Lincoln’s alleged scheme allowed him to acquire insurance coverage premiums funded by the federal authorities and crop insurance coverage indemnity funds “to which he was not entitled.”
“Defendant Gaylord Lincoln took benefit of the FSA’s profit packages, together with the DCP, ARC, and PLC packages, because the producer on these farms,” the grievance stated. “However as a result of his farming operation was so giant, defendant Gaylord Lincoln hit the $40,000 most of FSA’s DCP program profit funds as early as 2010.”
Lincoln allegedly created a option to get round crop insurance coverage contract ceilings.
“He positioned sure farmland below the names of his members of the family and staff,” the grievance alleges. “That allowed these members of the family and staff to fraudulently enroll with FSA within the DCP, ARC, and PLC packages as producers to obtain funds.”
The alleged straw operators took out land leases on farmland, together with some new and beforehand leased or owned by Lincoln. The grievance stated Lincoln offered cash for the leases.
“Then, on the course of defendant Gaylord Lincoln, the straw farming operators submitted farm operation plans to FSA for the straw farming operations by finishing and signing types,” the federal government alleges.
“In these types, the straw farming operators fraudulently licensed to FSA that they had been ‘producers’ (i.e., that they had been entitled to share in any crop produced and shared within the danger of manufacturing that crop). This was not true. In most cases, the crops had been planted, cultivated and harvested by defendants who alone profited from the crop manufacturing and bore all the chance of manufacturing these crops.
“The straw farming operators then returned their ill-gotten good points to defendants. Generally the cash was paid straight into ‘joint’ financial institution accounts to which defendant Gaylord Lincoln was a signatory with the straw farming operator and which defendants in the end managed.”
Todd Neeley could be reached at todd.neeley@dtn.com
Comply with him on Twitter @DTNeeley