Klickitat County farmer accused of collecting $500k in bogus crop insurance payments [The Spokesman-Review, Spokane, Wash.]

Oct. 13—A Klickitat County wheat grower owes the federal government more than a half million dollars after underreporting crop sales to obtain fraudulent insurance payments in 2015, according to a complaint filed last month.

The Justice Department filed a civil action against Rick T. Gray of Prosser, and one of his companies, on Sept. 28. The complaint alleges Gray hid the sale of about 14,000 bushels of wheat in 2015, claiming the lost crop to receive insurance indemnity payments totaling $540,028. Loss adjusters discovered the activity the following year and prevented a repeat of the illegal activity, according to a news release from the U.S. Attorney's Office in Eastern Washington.

The lawsuit alleges Gray sold the undisclosed wheat to several Washington grain elevators, and that the proceeds were used to pay off farm creditors.

Prosecutors earlier this year went to a federal judge to get an order for Gray to appear and answer questions in a deposition about his activity, according to court records.

Gray denied the allegations in a brief phone call last week.

No criminal case appears to have been filed in U.S. District Court. The U.S. Department of Agriculture's Risk Management Agency, responsible for defending against crop insurance fraud, maintains a list of cases that have been prosecuted across the United States.

An agency spokeswoman directed questions about the prevalence of such cases to the published list, saying the department "had nothing else to share at this time."

In many of the cases, those found responsible for the fraud were sentenced to prison terms in addition to monetary fines.

According to court documents, Gray's companies "held the largest amount of insured wheat acreage in Klickitat County" during the years of the alleged fraud.

Gray's company, Gray Land & Livestock, filed for Chapter 11 bankruptcy protection in February 2019. In that filing, Gray listed liabilities totaling more than $4 million.

Under the False Claims Act, a law signed during the Civil War in an attempt to protect the government against bad contracts with providers of military supplies, the government can seek damages triple the value of the lost income, meaning total damages as alleged could reach $1.6 million.

The case has been assigned to U.S. District Court Judge Thomas Rice in Spokane.

No court dates had been set as of Tuesday.

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