Fraud Stealing $100 Million Shows Flaws in U.S. Crop Insurance

 Wednesday, September 11, 2013

 Bloomberg

Harry Dean Canady will learn next month whether he’ll spend the rest of his life in prison for cheating taxpayers of more than $1 million and threatening to kill the U.S. agents who brought him to justice. A convicted felon with an alcohol-fueled temper, Canady, 64, pleaded guilty in December to defrauding the federal crop insurance system and is behind bars pending sentencing.His thieving was just a sliver of the largest fraud in the program’s 75-year history, a case that so far has ensnared 41 North Carolina tobacco farmers, insurance agents and claims adjusters whose law breaking cost taxpayers close to $100 million, federal prosecutors say. “The system has checks and balances in place,” says Banu Rangarajan, 45, the assistant U.S. attorney who led the prosecution. “The problem is all the checks and balances here were involved in the fraud. The adjusters were paid off. The agents were paid off. Everybody was paid off.” The continuing investigation comes as Congress -- despite tight federal budgets -- is poised to expand crop insurance, inviting new scrutiny to a system that subsidizes farmers and private insurance companies such as Wells Fargo & Co. (WFC) and Ace Ltd. (ACE) Elements of the corruption in eastern North Carolina’s tobacco belt went undetected for more than a decade, raising questions about oversight of the nation’s most expensive farm initiative.
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