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Red-handed

From the September 1, 2005, sentencing memorandum of the Western District Court of North Carolina, following a guilty plea by Robert and Viki Warren on charges related to a crop-insurance fraud scheme. They were sentenced to six and five years in prison, respectively, and to pay restitution of $9.15 million to the U.S. Department of Agriculture, which underwrites private crop insurers. The USDA estimates that last year $160 million was paid out in false crop-insurance claims.

The defendants claimed that they had suffered a catastrophic hailstorm, causing them to have to replant 252.5 acres of tomatoes. This claim was false in every detail. In fact, the defendants had planted only about ten acres of plants. As the testimony of their own workers established, they planted one corner of a field, and then planted sporadic rows throughout the remainder of the farm. They ran a planter over all the other rows of black plastic, punching holes to make it appear that plants had been planted.

Mr. Warren instructed his workers to buy ice cubes, throw them among the plants, and photograph them in order to simulate a hailstorm. A few days later, they spread mothballs among the plants, beat the plants with sticks to simulate hail damage, and took more pictures. The defendants then called the insurance company to report this “hailstorm.” The adjusters, when they arrived, noted that there were plants in only one corner of a field. They were told that all the other plants had already been gathered up and carried away. The adjusters also noticed that there was no dirt on the black plastic where all these plants had supposedly been yanked out of the ground, and that the only places where there were footprints in the dirt were where the plants were still standing. They thought it odd, but nevertheless approved the claim.

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SEE ALSO: Insurance crimes; Warren, Robert; Trials, litigation, etc.; Warren, Viki

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