A Warsaw-based crop insurance company and its CEO have agreed to pay a $500,000 fine after being accused of filing false federal crop insurance claims.
Federal prosecutors say Silveus Insurance Group, Inc. and its CEO James Cameron Silveus acted on behalf of Michigan farmer Gaylord Lincoln to file federal crop insurance claims and receive more federal farm benefit program payments than what he was legally allowed to receive.
According to a release from the U.S. Department of Justice, Lincoln placed some of his farm property and crops under the names of his hired farmhands who served as “straw” farming operators. Lincoln then ordered his employees to get federal crop insurance policies in their names to insure the land and crops, even though those were owned by Lincoln.
Federal investigators say Lincoln later received payments through subsidy premiums and indemnities on the false policies through the Federal Crop Insurance Corporation. In addition, Silveus and the company are accused of benefiting by payment of administrative costs through the money paid out by these claims.
As part of the settlement, Silveus Ins. Group, Inc. also agreed to a one-year monitoring period with the U.S. Department of Agriculture’s Risk Management Agency and Silveus agreed to a one-year exclusion from federal programs.
In addition, prosecutors say the case against Lincoln is pending separately in federal court.
“The federal crop insurance program is designed to promote the national welfare by creating economic stability for farmers,” said U.S. Attorney Andrew B. Birge. “This system relies on producers and their insurance agents to submit truthful and complete information, and my office is committed to investigating any allegations of fraud on the federal crop insurance program.”