Feds fine Eastern WA farmer $600,000+ for ‘unconscionable’ wheat crop insurance scam [The Idaho Statesman]

Idaho Statesman (Boise)

A Prosser farmer that defrauded the government out of hundreds of thousands of dollars in a wheat crop insurance scam has been fined more than $600,000.

Vanessa Waldref, the U.S. Attorney for the Eastern District of Washington, announced Wednesday that the government had received a fraud judgment of $607,000 against Rick T. Gray and Gray Farms and Cattle Co., which was registered in Prosser and operated in nearby Klickitat County.

The fraud scheme took place between 2015 and 2019, with Gray accused of submitting fraudulent claims for crop insurance, while selling hundreds of thousands of dollars more product than reported.

The USDA’s Farm Services Agency’s records reported that Gray and his companies — between 2014 and 2016 — held the largest amount of insured wheat acreage in Klickitat County, according to previous Herald reporting.

The fine announced this week was for misrepresenting more than 35,000 bushels of wheat that he sold during crop year 2015, leading to Gray fraudulently receiving about $180,000 in payments he wasn’t entitled to get, according to the news release.

The lawsuit filed in 2021 initially put the amount received in fraudulent payments at up to $540,000.

The USDA program is meant to subsidize farm owners against potential losses. Farmers can submit claims for losses due to weather and other factors.

“The Federal Crop Insurance program was created in the wake of staggering losses, poverty, and famine caused by the Dust Bowl,” Waldref said in the news release.

“It not only protects our farmers and farm workers, but protects our community’s food supply, and helps to keep food affordable. Attempting to cheat the system by claiming losses for crops that in fact were not lost but that the farm owner successfully sold, is simply unconscionable,” she said.

Waldref thanked the USDA’s Office of Inspector General and Risk Management Agency for their exceptional work uncovering the fraud.

Under the False Claims Act and the Financial Institutions Reform and Recovery Enforcement Act (FIRREA), Gray could have faced fines up to $1.6 million had he been found responsible for the full amount of payments he was suspected of defrauding.

Gray Land and Livestock was administratively desolved in February 2021.

In the civil complaint it states that once Rick Gray’s fraudulent scheme was detected, he filed for bankruptcy for that company, leaving creditor Columbia State Bank with more than $3.5 million in outstanding claims. That case is still being negotiated

Gray was found in contempt of court earlier this month in a separate bankruptcy suit relating to a debt from Critical Point Advisors after allegedly going onto property he no longer owns in Bickleton and removing several vehicles.