Fraud Case Settled For $170,000

The United States Attorney for the District of South Dakota, Brendan V. Johnson, announced that Black Hills Tree Farm (“BHTF”) and Western Hills Tree Farm (“WHTF”), both of Philip, South Dakota, jointly paid $170,000 to settle allegations that they defrauded the United States Department of Agriculture (“USDA”) crop insurance program.

The claim was brought under the federal False Claims Act and alleged that between September 1, 2005, and November 15, 2006, BHTF and WHTF engaged in a scheme to sell hail damaged trees for which BHTF already received crop insurance payments.  BHTF was obligated to return all monies received from the sale of those trees to the crop insurance program.  Instead, BHTF used WHTF as a third party to accomplish the sale and conceal from the USDA the true sale price of the trees.

“The crop insurance program is of vital importance to our farmers and ranchers, and my office will continue our efforts to vigorously protect the integrity of the program,” said Johnson.

According to the Settlement Agreement, BHTF and WHTF deny the allegations made by the United States, but settled the case without admitting liability to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation.

"The Federal Crop Insurance Program is a central component of our nation's farm safety net, and when one farmer takes advantage of that system, all farmers are hurt.  To preserve the safety net for honest, hard-working farmers, the Risk Management Agency actively works to decrease fraud, waste and abuse in the Federal Crop Insurance Program," said Brandon Willis, Acting Administrator of USDA's Risk Management Agency, which manages the Federal Crop Insurance Program.

The investigation was conducted by the USDA, Office of Inspector General.  The United States was represented by Assistant United States Attorney Robert Gusinsky.