Crop insurance fraud:
US: Tomato farmer sentenced to prison
R&V Warren Farms filed fake crop reports claiming losses that never happened. Prosecutors say employees threw ice cubes onto a tomato field, beat the plants with sticks and photographed the results to simulate hail damage and back up insurance claims.
Warren, 65, was sentenced in 2005 to 76 months in prison and ordered to pay $9.15 million in restitution to the U.S. Department of Agriculture.
But shortly after his release, Warren embarked on a scheme to evade currency reporting laws by making a series of cash bank deposits of less than $10,000. He pleaded guilty in June 2012, and a judge ruled the crime was a violation of his release on the previous conviction.
Assistant U.S. Attorney Don Gast said at a sentencing hearing this week in federal court in Asheville that Warren began the illegal activity while he was still serving probation in a halfway house.
“He owes the government millions of dollars in forfeiture money,” Gast said. “He was attempting to hide money he owed to the federal government. It appears the conduct was intended to thwart the court’s will.”
Defence attorney Sean Devereux argued for leniency. He said Warren has cooperated with the government in investigations of crop fraud.
“He is still in the farming business,” Devereux said. “I don’t know if I’ve had a client who is harder working. He got off track somewhere along the line.”
Warren declined to address the court.
R&V Warren Farms at one time was the largest vine-ripened tomato grower in the eastern United States, employing about 200 people. Based on Beaverdam Road in Candler, the company also had extensive operations in Mills River, Horse Shoe, Upstate South Carolina and eastern Tennessee.
According to court records, Warren and his wife in 1997 began the scheme to defraud the FCIC and the insurance companies that re-insured the agency of millions of dollars, obtaining crop insurance by creating false records showing a history of high tomato production.
Warren deposited more than $200,000 in cash at RBC Bank in Candler after his release from prison in November 2010 in amounts small enough to avoid having the transactions reported under the Bank Secrecy Act, according to court records.
Banks are required to file Internal Revenue Service forms for cash transactions of more than $10,000. The reports are designed to make it possible to identify suspicious cash transactions, and it’s against the law to structure transactions with the intent to evade the reporting requirement.
Bank records showed Warren deposited $208,463 over a five-month period, but the cash deposits never exceeded $9,000, according to the complaint. The document states Warren had asked a teller how much he could deposit without the bank having to file a report and was told about the $10,000 threshold.
A bank manager told an IRS investigator that she witnessed Warren making deposits of older $20 bills that “were rubber-banded, wrapped in aluminium foil and ‘freezing cold,’” and that he made comments such as “things are getting better,” a criminal complaint states.
A teller said sometimes the cash Warren deposited smelled “stale and musty,” and the rubber bands on the money broke because they lost elasticity, the government said.
Between Warren’s release from prison and the time he started making significant cash deposits in April 2011, “there was not a growing season within which to produce tomatoes as a crop or otherwise a viable business in operation by Robert Warren.”
Source: citizen-times.com