N.D. U.S. Attorney: Washburn Man Sentenced for Crop Insurance Fraud, Ordered to Pay $379,317.00 in Restitution, and Agrees to 5-Year Benefits Debarment

Targeted News Service (Press Releases)

BISMARCK, North Dakota, March 27 -- The office of the U.S. Attorney for the District of North Dakota issued the following news release:

United States Attorney Mac Schneider announced that on March 26, 2024, U.S. District Court Judge Daniel L. Hovland sentenced Kent Pfaff, age 60, from Washburn, North Dakota, to pay $379,317.00 in restitution to the United States Department of Agriculture (USDA) and to serve a three-year period of supervised release on a charge of False Statement to Influence the United States Department of Agriculture - RMA, colloquially known as "crop insurance fraud." On December 20, 2023, pursuant to a plea agreement, Pfaff pleaded guilty to this offense. As part of the plea agreement in this case, Pfaff voluntarily agreed, for a period of five years, to be excluded from receiving benefits from any federal procurement transaction authorized or funded by the USDA.

As further stated in the indictment and plea agreement, during farm year 2019, Pfaff severely understated his soybean production yield numbers to his crop insurance providers to falsely increase his crop insurance indemnity payments. In early 2020, based upon an independent appraisal of unharvested portions of Pfaff's soybean units, insurance adjusters discovered that the appraised soybean yield amounts were actually between four to five times higher than what Pfaff reported to his insurance company, the Risk Management Agency (RMA), and the Federal Crop Insurance Corporation (FCIC). Based upon this appraisal, and other information learned during a subsequent criminal investigation, agents from the United States Department of Agriculture - Office of Inspector General and the Special Investigations Staff of the Risk Management Agency uncovered evidence that Pfaff was "shifting production," which is a fraud scheme where a person will overreport production from one or more fields and underreport production from one or more different fields to manufacture or inflate claims to which they are not entitled.

"This result protects the integrity of the federal crop insurance program," Schneider said. "The United States Attorney's Office and federal law enforcement will aggressively pursue fraud to protect honest producers and American taxpayers. I credit our career prosecutors and their partners for seeing that justice was done in this case."

This case was investigated by the United States Department of Agriculture - Office of Inspector General and the Special Investigations Staff of the Risk Management Agency - United States Department of Agriculture.

Assistant U.S. Attorney Jonathan J. O'Konek and Assistant U.S. Attorney David Rappenecker prosecuted this case.