Washburn farmer sentenced for Crop Insurance Fraud

In a significant legal development, United States Attorney Mac Schneider announced that Kent Pfaff, a 60-year-old farmer from Washburn, has been sentenced to pay $379, 317 in restitution and serve three years of supervised release for committing crop insurance fraud. The sentencing took place on March 26, 2024, by U.S. District Court Judge Daniel L. Hovland, following Pfaff's guilty plea on December 20, 2023. Pfaffwas charged with making false statements to influence the United States Department of Agriculture's Risk Management Agency (USDARMA), a serious offense known colloquially as "crop insurance fraud." Under the terms of his plea agreement, Pfaffwill also be excluded from receiving benefits from any federal procurement transaction authorized or funded by the USDA for five years.

The indictment and plea agreement revealed that during the 2019 farm year, Pfaffgrossly understated his soybean production yield numbers to his crop insurance providers. This misreporting was intended to falsely boost his crop insurance indemnity payments. The deceit came to light in early 2020 when independent appraisals of unharvested portions of Pfaff's soybean crops showed yields four to five times higher than what he had reported to his insurance company, the RMA, and the Federal Crop Insurance Corporation (FCIC). The United States Department of Agriculture - Office of Inspector General and the Special Investigations Staffof the RMA conducted a thorough investigation, uncovering evidence of "shifting production," a fraudulent scheme where production is overreported in some fields and underreported in others to unjustly inflate insurance claims. U.S. Attorney Schneider emphasized the sentencing as a step toward preserving the integrity of the federal crop insurance program, highlighting the commitment of the United States Attorney's Office and federal law enforcement to combat fraud and protect both honest producers and American taxpayers. This case, prosecuted by Assistant U.S. Attorneys Jonathan J. O'Konek and David Rappenecker, underscores the rigorous efforts to uphold justice and deter fraudulent activities in agricultural practices.