She helped Kentucky farmers steal big from crop insurance. The scheme will cost her.

April 17--A Fleming County woman pleaded guilty Mondayto helping burley tobacco growers steal thousands in taxpayer dollars through the government-back program that insures crops.

Crop insurance agent Debra Muse, 63, of Wallingford faces up to 30 years in prison when she is sentenced on July 30. Muse and her attorney, John Helmuth of Lexington, had no comment after entering two guilty pleas before U.S. District Judge Joseph M. Hood.

Muse had been scheduled to go on trial in federal court Tuesday in Lexington, but her plea agreement cancels that proceeding.

Muse pleaded guilty to one count of conspiracy to defraud the United States and one count of making a false statement and report. The other 26 counts of an indictment returned in October were dismissed as part of a plea agreement.

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The purpose of the conspiracy was to profit through the filing of fake insurance claims and the sale of unreported tobacco, the indictment said.

The fraud detailed in the first count of the indictment occurred in late 2014 and early 2015 when Muse caused insurance payments totaling $169,251 to be made to three clients. The claims "falsely inflated" the amount of tobacco losses suffered by farmers, the indictment said.

In addition to working as a crop insurance agent, Muse was employed as a seasonal worker at Clay's Tobacco Warehouse in Mount Sterling.

For the warehouse, Muse entered information into a software program that tracked the purchases, sales and shipments of tobacco.

As a crop insurance agent, Muse obtained policies for her client farmers. Those farmers, "at the urging of and with help" from Muse, filed false claims in various ways, the indictment said.

Co-conspiring farmers profited under the scheme because they were paid twice for each pound of tobacco: once through the false crop insurance claim and also through the sale of unreported hidden tobacco, the indictment said.

Muse profited by collecting the original insurance commission, by retaining and expanding the business of her crop insurance clients and by securing business for the tobacco warehouse.

Muse pleaded guilty to aiding and abetting a grower, identified only by the initials "B.O.," with making a false statement. A false sales bill showed that B.O. sold 2,472 pounds of tobacco at auction on Jan. 7, 2015, at Clay's Tobacco Warehouse when he did not.

The amount of restitution Muse will pay will be determined at sentencing or at a hearing, the plea agreement says.

Muse's indictment and plea are the first since a federal investigation into crop insurance fraud became public in December 2015. The alleged conspiracy involved Central Kentucky tobacco farmers, crop insurance agents, crop insurance adjustors and tobacco warehouse owners/employees.

Last month a Paris farmer was indicted on charges that he grossed $2.6 million through fraudulent crop-insurance claims and other illegal acts.

Ronnie Jolly, 46, owned or rented farm land in Bourbon, Scott, Bath, Fleming and Montgomery counties and was a major producer of tobacco, corn and soybeans, according to the indictment. Jolly's trial is scheduled for July 31 in Lexington.

It's unclear whether Muse was tied to Jolly. She is not named in his indictment, and the farmers mentioned in her indictment were identified only by the initials J.H., R.M. and B.O. Jolly's indictment said that he sold tobacco at Clay's Tobacco Warehouse in Mount Sterling, the same warehouse where Muse worked.

Assistant U.S. Attorney Erin Roth would not say Monday whether she anticipated any other crop-insurance fraud indictments.

Greg Kocher: 859-231-3305, @HLpublicsafety

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