News and Press Releases

FOR IMMEDIATE RELEASE:

MONDAY - January 31, 2011

ADJUSTER RECEIVES PRISON TIME FOR ROLE IN
TOBACCO INSURANCE FRAUD SCHEME

RALEIGH - United States Attorney George E.B. Holding announced that in federal court today United States District Judge James C. Dever III, sentenced DENNIS WRAY HAWLEY, 64, of Wilson, North Carolina, to 12 months’ and one day imprisonment followed by two years’ supervised release with the first 12 months under house arrest. The sentence reflected a reduction based upon HAWLEY’s cooperation in the crop insurance fraud investigation. The Court also imposed a fine of $158,000, which represents his proceeds from the crime.

A Federal Grand Jury returned a Criminal Information on July 16, 2009. On July 27, 2009, HAWLEY pled guilty to two counts of aiding and abetting false statement in connection with the Federal Crop Insurance Program.

HAWLEY, an insurance adjuster and president of Dennis Hawley, Inc., worked for one of the insurance agencies contracted by the government to service crop insurance policies. As such, he was prohibited from having a business relationship with any insurance agent. According to the Criminal Information, in 2005 and 2006 HAWLEY falsely declared he did not have a business relationship with ARMTech Insurance Services. Later in both of those years, HAWLEY received checks that represented premiums collected as a result of the sale of crop insurance policies. This payment was made for his role in signing false and fraudulent crop insurance claims.

The fraud committed in these numerous tobacco insurance cases has been extensive,” commented Mr. Holding. “It is only with the cooperation and teamwork among all the agencies involved in the case that we are able to bring each defendant to justice. We will continue to work together from initial investigation through prosecution to ensure that those who defraud the government will understand the error of their ways.”

“USDA-OIG is committed to ensuring that fraud in the federal crop insurance program is thoroughly investigated. We will continue to work hand-in-hand with the US Attorney’s Office and other federal agencies such as the USDA-RMA Special Investigations Branch and the IRS, Criminal Investigation Division, towards our universal goal of prosecution of individuals who commit fraud in government programs,” stated Karen Citizen-Wilcox, Special Agent-in-Charge, USDA-OIG-Investigations. “The sentencing in this case, of an insurance adjuster, will prove as a strong deterrent to those committing fraud against the federal crop insurance program and will help protect the integrity of this program thus ensuring that taxpayer dollars are safeguarded. The investigation into crop insurance fraud in eastern North Carolina continues to unfold and a number of the schemes utilized have been exposed and stopped.”

Jeannine A. Hammett, Special Agent in Charge, Internal Revenue Service - Criminal Investigations stated, “Mr. Hawley manipulated governmental programs to line his pockets and he stole from every taxpaying citizen. IRS-CI is committed to pursuing these cases aggressively to protect the public.”

Investigation of this case was conducted by the United States Department of Agriculture, Office of the Inspector General, Risk Management Agency, Special Investigations Branch, and the Internal Revenue Service, Criminal Investigation Division. Assistant United States Attorney Banumathi Rangarajan with the Office’s Economic Crimes Section served as lead prosecutor on the case.

 

News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.

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