News and Press Releases

business owner sentenced in federal crop insurance fraud scheme

FOR IMMEDIATE RELEASE
January 29, 2013

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court yesterday STEVEN M. HARDWICK, 53, of Nichols, South Carolina, was sentenced by Chief United States District Judge James C. Dever III, to 12 months and one day imprisonment, restitution of $171,513, and 5 years of supervised release. HARDWICK previously pled guilty to conspiring to make false statements, to make material false statements, and to commit mail fraud and wire fraud, all in violation of Title 18, United States Code, Section 371 and aiding and abetting these crimes in connection with the Federal Crop Insurance Program, in violation of Title 18, United States Code, Section 1014.

Mr. Walker stated, “As a farmer, Hardwick understood the importance of the federal crop insurance program as a safety net to the community in times of disaster and yet, he helped another steal from that same program. The sentence imposed today reflects the seriousness of his offense and should serve as a deterrent for others.”

According to the investigation, which stems from an ongoing crop insurance investigation, HARDWICK allowed his name to be used in connection with federal crop insurance and tobacco contracts to facilitate the sale of tobacco not reported to the federal government. The Criminal Information, filed on September 16, 2011, alleges that HARDWICK, maintaining dual residences in Clarendon, North Carolina, and Nichols, South Carolina, owned and operated a sole proprietorship which engaged in the business of tree spraying and planting.

The Information goes on to allege, an unnamed farmer devised the scheme to defraud the government and recruited HARDWICK and others to act as nominee farmers, obtaining federal crop insurance policies in their own names for certain crops, even though they did not engage in any farming. From September, 2006, to June, 2010, HARDWICK and others executed applications for crop insurance for tobacco, soybeans, and peanuts, falsely declaring the crop to be their own. HARDWICK and others secured identifying information for various persons in the community, executing contracts with tobacco companies using the stolen names and identifying information. HARDWICK and other co-conspirators secured flue-cured tobacco marketing agreements in their own names even though they were not the bona fide producer of the crop. The unnamed farmer sold his tobacco and other crops on contracts written in the names of other co-conspirators or unknowing victims, profiting under the scheme by being paid twice for each pound of tobacco. HARDWICK and other co-conspirators profited under the scheme because they were paid for the use of their names on the contracts.

As discussed in open court yesterday, HARDWICK also sold tobacco not reported to the federal government for other farmers separate and apart from the conspiracy described above. HARDWICK also lied to the USDA - Farm Service Agency County Committee on two occasions in an effort to conceal the fraud.

IRS-Criminal Investigation Special Agent in Charge Jeannine A. Hammett stated, “Mr. Hardwick manipulated governmental programs to line his own pockets. The object of this fraudulent scheme was to swindle the government and the taxpaying public.” “Once again, IRS criminal investigators along with the United States Attorney’s Office have vindicated the interests of the people of the United States.”

Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigation; the United States Department of Agriculture - Office of Inspector General, Investigations; and the United States Department of Agriculture - Risk Management Agency, Special Investigations Branch. Assistant United States Attorney Banumathi Rangarajan is serving as prosecutor for the government.

 

 

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