Wash. U.S. Attorney Office: U.S. Files False Claims Act Complaint Against Klickitat County Farm-Owner for Defrauding Federal Crop Insurance

SPOKANE, Washington, Sept. 29 -- The office of the U.S. Attorney for the Eastern District of Washington issued the following news release:

The United States has filed a civil enforcement action against Rick T. Gray and one of his companies, Gray Farms & Cattle Co. LLC, in United States District Court, alleging Mr. Gray's multi-year scheme to defraud the federally backed crop insurance program designed to help farmers nationwide. According to the Complaint filed by the United States, Mr. Gray made tens of thousands of dollars through hidden and undisclosed wheat sales while falsely claiming a wheat production loss thereby obtaining over $500,000 in crop insurance loss indemnity payments, all of which were fully backed by the United States Department of Agriculture (USDA) through the Federal Crop Insurance Corporation.

Under the False Claims Act , Mr. Gray and his company face triple damages for any fraudulently caused losses to the United States (over $1.6 million in triple damages as alleged) as well as additional penalties under the False Claims Act and the Financial Institutions Reform and Recovery Enforcement Act.

According, to the Complaint filed by the United States, in 2015 Mr. Gray concealed more than half of the wheat production of companies he owned and/or controlled by falsely claiming to crop insurance loss adjusters that those companies had only sold approximately 21,000 bushels of wheat for approximately $130,000, when in actuality his companies also sold over 35,000 bushels of wheat for an additional approximate $184,000 in hidden and undisclosed wheat sales. As alleged, Mr. Gray's false statements netted him and the companies he owned and/or controlled at least $540,028 in insurance indemnity payments for 2015. Moreover, as stated in the Complaint, Mr. Gray was attempting to execute the same scheme in 2016 but was discovered by loss adjusters and the USDA before he once again fraudulently obtained phony crop insurance loss payments.

Assistant United States Attorneys Tyler Tornabene and Dan Fruchter are handling this matter with analytical and investigative support from the United States Department of Agriculture Office of Inspector General and the United States Department of Agriculture Risk Management Agency. The case has been filed as United States v. Rick T. Gray et al., in the United States District Court for the Eastern District of Washington under cause number 1:21-CV-03126. The claims articulated in the Complaint are allegations only; at this time there has been no determination of liability.