According to the United States Attorney’s Office in the District of Colorado, two farmers will see significant fines and jail time for tampering with rain gauges and taking advantage of drought relief as a result of their tinkering. In all, the men will see several months of jail time and a combined $6.6 million fine for their efforts.
U.S. Attorney Cole Finegan announced that Patrick Esch and Ed Dean Jagers of Springfield, Colorado tampered with and damaged rain guages in southeast Colorado between July 2016 and June 2017 to prevent those gauges from accurately measuring rainfall. Some of the rain gauges involved in this scheme were run by NOAA’s National Weather Service.
Specifically, the U.S. Government said that some gauges were filled with silicone to prevent them from collecting moisture, cutting wires, covering up the gauges, or detaching and tinkering with the bucket that collects precipitation in the device. Finegan said, “This tampering created false records making it appear that less rain had fallen than was the case.”
The U.S. 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. By tampering with and in some cases destroying these official rain monitoring devices, Esch and Jagers defrauded insurance programs by making it appear there was less precipitation than what really fell.
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.
Due to those violations, Esch and Jagers agreed to pay a combined $3.5 million to settle those civil allegations. They also pled guilty to criminal charges for their roles in this conspiracy. Through that plea, they were sentenced to pay a combined $3.1 million in restitution and were sentenced to jail. Esch was sentenced to a jail term of 2 months while Jagers was sentenced to 6 months.
“Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused,” said U.S. Attorney Cole Finegan. “This case also shows the full measure of justice that can be achieved when our office uses both civil and criminal tools to protect vital government programs.”
“The OIG works steadfastly to uphold the integrity of Federal programs, and we’ll relentlessly investigate those who defraud the American taxpayers and the Federal Government,” said Special Agent-in-Charge Shawn Dionida with the U.S. Department of Agriculture, Office of Inspector General. “We thank the U.S. Attorney’s Office and our law enforcement partners for pursuing justice until the conspirators were held accountable for tampering with government equipment for the purpose of exploiting the Federal Crop Insurance Program to fraudulently receive funds they were not entitled to receive.”
“These defendants orchestrated a scheme to defraud the federal government. Holding them accountable would not have been possible without assistance from our partners at the U.S. Attorney’s Office for Colorado and the Offices of the Inspector General at U.S. Department of Agriculture and U.S. Department of Commerce,” said FBI Denver Special Agent in Charge Mark Michalek. “The FBI will continue to track down opportunists who try to cheat the system for personal benefit.”
The investigations into this crop insurance fraud scheme were a coordinated effort by the U.S. Attorney’s Office for the District of Colorado, the U.S. Department of Agriculture, Office of Inspector General, the U.S. Department of Commerce, Office of Inspector General, and the FBI. The criminal matter was handled by Assistant United States Attorney Bryan Fields. The civil matter was handled by Assistant United States Attorney Jasand Mock.
