Prosecution of widespread crop insurance fraud in Kentucky has continued with the indictment of a tobacco warehouse manager who allegedly facilitated some of the schemes.

Thomas H. Kirkpatrick, manager of Farmers Tobacco Warehouse in Danville, conspired with at least four farmers and provided them with paperwork, allowing them to falsely claim crop expenses, the March 13 indictment reads.

“It was the purpose of the conspiracy to profit from generating false documentation that made it appear as though farmers purchased tobacco they actually produced from Farmers Tobacco Warehouse, which the farmers then submitted to their insurance adjusters in order to decrease their production reported to the FCIC (Federal Crop Insurance Corp.), leading to inflated insurance indemnity payments,” the indictment noted.

Prosecutors explained that most federal crop insurance policies are sold by approved private insurance companies, called approved insurance providers, or AIPs, through an insurance agent working on behalf of the AIP. AIPs are reinsured by the FCIC.

One of the farmers named in the indictment, David Hunt, pleaded guilty last week to conspiracy to commit money laundering, the Lexington Herald-Leader reported. Two others also have pleaded guilty and are awaiting sentencing.

If convicted, Kirkpatrick could face up to 20 years in prison and forfeiture of assets.

It’s the latest developments in a federal investigation in recent years that has led to the arrest and convictions of some two dozen farmers, warehouse workers and an insurance adjuster, the news site reported. Michael McNew, a former insurance agent and adjuster, was sentenced recently to seven years in prison and was ordered to pay $10 million in restitution.

Topics
Fraud
Agribusiness
Kentucky