We know how to fight for America’s hardest-working men, women, and families.

The agriculture, ranching, and farming community has been a staple in American history since Jamestown. Throughout the years, ranching and farming have been a life-or-death profession that has been a core pillar in the industry, providing food and jobs for the communities, country, and globally for generations and now still a necessity as the world faces global food shortages.

Historically, when most think of these industries, they are under the impression that these hardworking Americans are just growing and selling their product and livestock in a fair marketplace and that the fruits of their labor are rewarded based on how the farms perform. Little thought is given to the volatility and thin profit margins of what these industries face economically and the effects of the many variables that can leave these individuals decimated by something as simple as a change in weather, livestock disease, or pest invasion.

With an industry that is constantly under fire from all sides and battling misinformation and even smear campaigns from documentarians, it’s understandable how our family farms are giving up and selling as the scrutiny and red tape have become an economic burden that has left many hopeless of passing down a once respectable legacy to the next generation.

At Castaneda Law, we believe in fighting to protect your family name

in USDA & FSA investigations and prosecutions.

The Castaneda Law Firm specializes in client representation in: 

• Federal investigations and prosecutions.

• Challenging and defending seizures by federal agents and government agencies.

• Requesting review of good farming practices.

• Fighting adverse action decisions in the administrative and judicial review process.

• Money laundering.

• Fraud.

• Diversion.

• Plea deals.

• Sentencing.

• Substantial assistance and cooperation to avoid prosecution or lessen a federal term of imprisonment.

HISTORICAL PERSPECTIVE

As we all know, America has faced historical hardships that have economically burdened the ranching, farming, and agricultural community. The Great Depression and the Dust Bowl left farmers decimated, and to stabilize US food production, the Federal Crop Insurance Corporation (FCIC) was formed in 1938 experimentally through the passage of the Federal Crop Insurance Act (“FCIA”). To make crop insurance more affordable and accessible to ranchers and farmers, FCIA was expanded through the passage of multiple amendments, such as the 1980 amendment Federal Crop Insurance Reform Act (“FCIRA”).

FCIA’s intent was “to promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance . . . .” 7 U.S.C. § 1502. It paved the way for the FCIRA to improve the effectiveness of FCIA, increase participation, and provide better risk management tools for ranchers and farmers in the face of unpredictable weather events, diseases, pests, and other challenges to crop production.

The FCIC reports to the United States Department of Agriculture (USDA) and the Risk Management Agency (“RMA”), which administers the federal crop insurance program on behalf of the FCIC. Since the program is primarily a reinsurance program, it allows the federal government to financially back crop insurance offered by private insurance providers instead of the federal government writing the crop insurance policies.

PROTECT THE RANCHES & FARMS:

CROP INSURANCE 101

Step 1: USDA sets regulations on insurance contracts sold by private insurance companies that contain standardized policy terms.

Step 2: The rancher or farmer purchases a policy from a private insurance provider.

Step 3: Something detrimental occurs, destroying all potential earnings leaving a family ranch or farm exposed and vulnerable.

Step 4: Never fear: you have insurance here. The policyholder makes a claim on their crop insurance policy.

Step 5: Show me the money. The private insurance company pays the policyholder so that the ranch or farm can return to what they do best: planting, harvesting, ranching and farming.

Step 6: FCIC reimburses the private insurer and also subsidizes a portion of the premiums paid by the insured farmer or rancher.

CROP INSURANCE FRAUD

Who can commit crop insurance fraud?   

It can range from the roles of that of accountants, CPAs and business managers to the ranchers or farmers directly. It can trickle up through all those involved in the direct provision of the coverage, from warehouse operators to the insurance companies themselves.

Crop insurance fraud harms the insurance companies but also affects the integrity of the entire insurance system. It ultimately results in increased costs for honest policyholders and taxpayers.

How does crop insurance fraud occur?

The fraudulent claims can manifest in many forms, from falsified documents of the directly harvested crops, lack of transparency regarding crop damage, reporting falsified livestock loss, and the actual sale of goods.

Fraud can also occur during the claims process, where fraudulent information is provided to adjusters or inspectors. Since the crop insurance program relies on self-reporting, the lack of transparency will manifest when one lies or intentionally misrepresents facts in the insurance claim for financial gain.

What is the penalty and punishment for committing crop insurance fraud?

Human nature for those struggling financially may find it tempting to participate in such acts and face hefty fines, land seizure, and federal prison sentences. However, the penalties vary depending on the jurisdiction and the severity of the offense.

Penalties can range from fines and restitution to imprisonment.

The Federal Crop Insurance Act allows for civil penalties of up to $10,000 per violation.

In January of 2023, the Department of Justice (DOJ) sentenced two men in Sully County, South Dakota, for falsifying statements in a Federal Crop Insurance litigation.

They were sentenced to 18 months and 24 months in federal prison, followed by two years of supervised release, and ordered to pay a total combined restitution to the United States in the amount of $1,324,940.00.

The owners of the ranch and farm falsely certified that they planted 2,200 total acres of sunflowers and, a year later, claimed they planted 47.5 acres of corn and that the entirety of both crops failed. Neither the sunflowers nor corn were ever planted, and they wrongfully received indemnity from the insurance claim. The defendants fraudulently obtained over $1.3 million in benefits.

Whistle-Blowers and False Accusations of Fraud

The False Claims Act, which is a law that imposes liability on persons and companies who defraud governmental programs, has many functions. As it pertains to crop insurance fraud, it allows private citizens, known as “whistleblowers” or “quo tam relators,” to file lawsuits on behalf of the government to recover damages resulting from fraud against the government.

The law incentivizes individuals to come forward by making them eligible to receive a portion of recovered damages ranging from 15%-30% of the total amount. It was meant to combat fraud by encouraging those to come forward without being penalized or retaliated against. However, this has also become a double-edged sword that has been perverted by corruption.

Instances of false allegations or fraudulent claims occurring against ranchers and farmers regarding crop insurance can happen. Although these cases are exceptions rather than the norm, when a ranch or individual is falsely accused by a whistle-blower or investigated for crop insurance fraud, it can become emotionally and financially distressing.

Allegations of crop insurance fraud can be falsely passed on to the ranchers and farmers when the real perpetrators could be the warehouse workers, insurance agents, adjusters, and any individual connected to the crop insurance industry.

Crop insurance fraud can be even as simple as an innocent error in paperwork,

 inventory, sales numbers, or bookkeeping.

PROTECT YOUR LEGACY!

CALL US FOR A CONSULTATION.

If you find yourself the subject of an investigation or challenging situation, you should immediately seek legal counsel in these complex matters before talking with any investigator or providing any documents. It is your constitutional right to protect yourself and your business.

The Castaneda Law Firm is staffed with a former federal prosecutor and retired federal agents with extensive experience in federal courts throughout the United States and worldwide. We believe in fighting for you while holding ourselves to a standard of excellence and educating you about your rights for your own mental well-being. Don’t blindly risk everything you’ve worked so hard for.