Kentucky Acting United States Attorney: Former Kentucky Warehouse Owner, Former Crop Insurance Agent Sentenced on Crop Insurance Fraud Charges

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LEXINGTON, Kentucky, September 10 — The game we attorney East district of Kentucky, Carlton S. Shier IV, issued the following press release:

Michael mcnew, former resident of Mount sterling, was sentenced to 86 months in federal prison today by United States District Court Judge Karen C. Caldwell for conspiracy to commit electronic fraud, as part of a crop insurance fraud scheme. Shortly after, Roger wilson, resident of Mount sterling, was sentenced to 12 months in federal prison, also by Judge Caldwell, for conspiracy to commit crop insurance fraud.

McNew, 51, was an expert in crop insurance until 2012 when he became a crop insurance agent. According to his plea deal, in his role as an adjuster, he agreed with the agricultural producers to inflate or fabricate the damage to their crops and to adulterate the number of acres of crops planted during the preparation of the crops. adjustments on their loss claims on the Multi-risk crop insurance (“MPCI”) policies. As an insurance agent, he admitted to having committed fraud on MPCI loss claims, as well as private loss claims against his contracted employer, ARMtech Insurance Services. He continued to inflate or tamper with the reported acreage and crop damage and helped submit a generic photograph of the loss that falsely claimed to show damage to a particular grower’s farm. He also admitted to submitting crop insurance claims for people he knew were not farmers, but were relatives or friends of his fellow farmer conspirators, in order to spread losses and obtain better guarantees. In total, McNew admitted to causing a total loss of over $ 23,000,000.

Wilson, 88, had Clay Tobacco Warehouse, a tobacco warehouse, a grading station and an auction house in Mount Sterling, Kentucky. In his plea agreement, he admitted that from September 2013 until at least May 2018, he arranged for the farmers to buy low-quality tobacco, so that they could use this tobacco to obtain bogus qualities to apply to their loss insurance claims, which resulted in payments of ‘inflated allowance. Documents filed with the court showed that Wilson also produced false sales receipts, shipping reports and bale tags, all in an effort to facilitate fraudulent crop insurance claims. These documents showed that Wilson was responsible for more than $ 9,000,000 losses to the federal government.

McNew pleaded guilty in October 2020. Wilson pleaded guilty in May 2021.

Under federal law, McNew must serve 85% of his sentence, while Wilson must serve his full sentence. Upon release from prison, they will be under the supervision of the United States Probation Office for a period of three years. McNew must also pay the restitution of $ 19,596,936. Wilson’s restitution order is still pending in court.

Other recent convictions for crop insurance fraud have resulted in the following penalties:

* Ronnie jolly, 50, of Paris, Ky., was sentenced on August 13, 2021, to 36 months in prison and five years of supervised release.

* Bradley Prize, 38, of Carlisle, Ky., was sentenced on August 20, 2021, to 30 months in prison and three years of supervised release.

* Brandon Award, 30, of Paris, Ky., was sentenced on August 20, 2021, to six months in prison and three years of supervised release.

* Jimmy Award, 61, of Carlisle, Ky., was sentenced on August 20, 2021, to six months in prison and three years of supervised release.

Carlton S. Shier, IV, Acting United States Attorney for East district of Kentucky, Jason M. Williams, Special agent in charge, Office of the Inspector General of the United States Department of Agriculture; Edward J. Gray, special agent ad interim responsible, Federal Bureau of Investigation, Louisville Field Office; Bryant jackson, special agent in charge of the Internal Revenue Service-Criminal Investigation; and Juan garrett, Director, Kentucky Department of Insurance Insurance Fraud Investigation Division, jointly made the announcement.

The investigations were carried out by the Office of the Inspector General of the United States Department of Agriculture, United States Department of Agriculture Risk Management Agency Special Investigations Staff, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and Kentucky Department of Insurance. United States is represented by deputy attorneys for the United States Erin roth and Catherine anderson.


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