Two southeast Colorado farmers sentenced to prison and ordered to pay millions for defrauding federal crop insurance program
DENVER, Colo. (KRDO) - The United States Attorney's Office (USAO) for the District of Colorado announced Friday that two farmers from Springfield, Colorado have agreed to pay more than $6.5 million to resolve allegations that they defrauded federal crop insurance programs by tampering with and damaging rain gauges.
According to the USAO, the United States Department of Agriculture supports farmers and ranchers by providing federal funding for crop insurance programs that pay indemnities when there is less than the usual amount of precipitation.
The USAO said Patrick Esch and Ed Dean Jagers concocted a scheme to defraud these insurance programs by making it appear that there was less precipitation in their area than there actually was. To carry out that scheme, the members of the conspiracy, including Mr. Esch and Mr. Jagers, tampered with and damaged rain gauges in southeast Colorado between July 2016 and June 2017 to prevent those gauges from accurately measuring rainfall. Some of the rain gauges that were tampered with belonged to the National Oceanic and Atmospheric Administration and were operated by the National Weather Service. This tampering created false records making it appear that less rain had fallen than was the case.
The USAO said the United States investigated Mr. Esch and Mr. Jagers using civil tools, including the False Claims Act, which imposes civil penalties for certain types of fraud on the federal government, and the Financial Institutions Reform, Recovery, and Enforcement Act, which imposes civil penalties for a variety of misconduct, including knowingly making any false statement or report for the purpose of influencing in any way the action of the Federal Crop Insurance Corporation. The United States alleges that this conduct violated both statutes. Mr. Esch and Mr. Jagers have agreed to pay a combined $3.5 million to settle these civil allegations.
According to the USAO, the United States also indicted Mr. Esch and Mr. Jagers criminally for their roles in the conspiracy. Mr. Esch and Mr. Jagers both pled guilty and were sentenced to pay a combined $3.1 million in restitution. Mr. Esch was also sentenced to be imprisoned for a term of two months. Mr. Jagers was sentenced to be imprisoned for a term of six months.
The claims resolved in the civil settlements are allegations. In agreeing to settle, Mr. Esch and Mr. Jagers did not admit liability except to the extent admitted in their guilty pleas, according to the USAO.
