Colorado Farmers Agree to Pay Over $6.5 Million in Fraud Case Involving Federal Crop Insurance

In a significant fraud case highlighting the misuse of federal agricultural support programs, Colorado farmers Patrick Esch and Ed Dean Jagers have agreed to pay more than $6.5 million to settle allegations of defrauding federal crop insurance programs. U.S. Attorney Cole Finegan announced the resolution, which stems from the farmers’ scheme to manipulate rain gauges to falsely report lower precipitation levels, thereby unjustly benefiting from crop insurance claims.

Between July 2016 and June 2017, Esch and Jagers engaged in fraudulent activities in southeast Colorado, including covering rain gauges with agricultural equipment, using silicone to block gauge collection, and physically altering National Oceanic and Atmospheric Administration-operated equipment. This deliberate tampering was aimed at influencing the Federal Crop Insurance Corporation by creating inaccurate precipitation records, prompting an investigation under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act.

The civil settlement amounts to $3.5 million to address these allegations, alongside criminal charges that resulted in guilty pleas from both individuals. Esch and Jagers were ordered to pay an additional $3.1 million in restitution, with respective prison sentences of two and six months. While the civil settlements do not imply admission of liability beyond their guilty pleas, this case underscores the legal and ethical responsibilities of participants in federal insurance programs and the concerted efforts of various government agencies to uphold the integrity of such systems.