Washington wheat farmer fined for crop insurance scam

SPOKANE, Wash. - A federal judge has imposed a $607,284 judgment against a Klickitat County, Washington, wheat farmer who filed false crop insurance claims.

Rick T. Gray failed to report 35,378 bushels of wheat he sold while collecting USDA insurance payouts, according to a ruling Aug. 21 by U.S. District Judge Thomas O. Rice in Spokane.

In a summary judgment, Rice found Gray guilty of violating the False Claims Act and levied maximum fines for each count on Gray and Gray Farms & Cattle Co.

"Attempting to cheat the system by claiming losses for crops that in fact were not lost but that the farm owner successfully sold, is simply unconscionable," U.S. Attorney Vanessa Waldref said in a statement.

Efforts to obtain comment through Gray's lawyer were unsuccessful.

Gray took out two crop insurance policies in 2015 on behalf of Gray Farms and also Gray Land & Livestock, according to court records.

Gray submitted claims on both policies and reported selling all the wheat, 20,346 bushels, to a granary in Klickitat County. The USDA paid a total of $519,706 on the two policies.

Gray didn't report selling wheat to three other granaries outside the county, including one in Oregon, according to court records.

If he had reported those sales, the insurance payout would have been reduced by $180,429.

Gray denied the allegations and said in a sworn statement that the 35,378 bushels of wheat were grown between 2006 and 2012.

The wheat was purportedly stored in bins on land farmed by Gray Farms and Gray Land. Gray did not ask for a pre-harvest inspection in 2015 to document that he had stored wheat, according to court records.

In his ruling, Rice stated that Gray didn't explain why he had stored wheat for up to nine years, nor why he didn't sell the wheat in Klickitat County, "rather than truck it to three other distant granaries."

Under the False Claims Act, fines are based on tripling the amount falsely gained. Rice also levied the maximum $11,000 fine against Gray and Gray Farms on all counts, driving the judgment past $600,000.