Largest U.S. Crop Insurer Settles With USDA for $ 10 Million

Risk Management Agency Program Announcement

Contact: Larry Piatz (202) 720-0642
Larry_Piatz@wdc.usda.gov

Washington, DC, Dec. 19, 2000 -- Risk Management Agency (RMA) Administrator Ken Ackerman announced that FCIC has received $10 million from Rain and Hail L.L.C. (Rain and Hail) to settle allegations under the Federal False Claims Act. The payment is the largest settlement in the history of the crop insurance program.

"First, I want to thank our compliance investigators for pursuing this matter for six long years," said Ackerman. "In this case, the company's quality control process failed to prevent or report false information that resulted in overpayments."

The settlement follows investigation into 1994 raisin crop insurance claims by RMA's Western Regional Compliance Office, Office of Inspector General, Office of the General Counsel, and the U.S. Attorney's Office.

The United States alleged that in 1994, Rain and Hail misrepresented the condition of certain raisins and used fraudulent documentation to support their claims. In turn, these misrepresentations resulted in overpayments.