17 Tobacco Farmers Settle Civil Claims In Widespread Crop Insurance Fraud Investigation

Seventeen tobacco farmers have agreed to resolve civil allegations that they violated the False Claims Act, a federal law that prohibits submitting false or fraudulent claims for payment to the government.

As part of their civil settlement agreements, all of the defendants admitted that they submitted, or caused to be submitted, false claims to a federally-backed crop insurance program.

The United States Department of Agriculture administers its crop insurance program through approved private insurance companies, who sell federally-backed multi-peril crop insurance (“MPCI”) policies to farmers.

MPCI policies provide insurance coverage for harvests that are at risk from inclement weather or other naturally occurring events.

Under the crop insurance program, eligible farmers are paid benefits based, in part, on factual representations as to the amount of crop harvested and sold and the cause of loss.