Colorado farmers to pay $6.5M for defrauding crop insurance

KDVR-TV (Denver, CO)

SPRINGFIELD, Colo. (KXRM) — Two farmers from southeastern Colorado have been ordered to pay $6.5 million to resolve allegations that they defrauded federal crop insurance programs by tampering with and damaging rain gauges.

According to the Department of Justice, Patrick Esch and Ed Dean Jagers concocted a scheme to defraud federal crop insurance programs by making it appear that there was less precipitation in their area than there actually was.

The program was put in place by the United States Department of Agriculture to support farmers and ranchers by paying indemnities when there is less than the usual amount of precipitation.

To carry out that scheme, the DOJ said the members of the conspiracy, including Esch and Jagers, tampered with and damaged rain gauges in southeast Colorado between July 2016 and June 2017 to prevent those gauges from accurately measuring rainfall. Some of the rain gauges that were tampered with belonged to the National Oceanic and Atmospheric Administration and were operated by the National Weather Service.

The conspirators used various means and methods to tamper with the rain gauges, the DOJ said. Esch covered gauges with agricultural equipment and used other means as well, such as filling gauges with silicone to prevent them from collecting moisture, cutting wires on the gauges, or detaching and then tipping over the bucket that collected precipitation. The DOJ said Jagers typically used an agricultural disc blade to cover up a rain gauge in Lamar. This tampering created false records, making it appear that less rain had fallen than was the case.

Prosecutors investigated Esch and Jagers both civilly and criminally, and they have been ordered to pay a combined $6.5 million to settle the civil allegations as well pay restitution. Esch was sentenced to be imprisoned for two months, and Jagers was sentenced to six months.

"Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused," said U.S. Attorney Cole Finegan. "This case also shows the full measure of justice that can be achieved when our office uses both civil and criminal tools to protect vital government programs."