FOR IMMEDIATE RELEASE:
WEDNESDAY - October 21, 2009
RALEIGH - United States Attorney George E.B. Holding announced that in federal court today MARK DAVIS PRIDGEN, 62, of Wilson, North Carolina, pled guilty before United States District Judge James C. Dever, III, to conspiring to make false statements, in violation of Title 18, United States Code, Section 1014; to making material false statements, in violation of Title 18, United States Code, Section 1001; and to committing mail fraud and wire fraud, in violation of Title 18, Unites States Code, Section 1341 and 1343, respectively, all in violation of Title 18, United States Code, Section 371, and to conspiring to launder money, in violation of Title 18, United States Code, Section 1956(h).
A Criminal Information was filed by the United States Attorney’s Office on October 9, 2009.
PRIDGEN, along with farmers, warehousemen, crop insurance adjusters, crop insurance agents, and others, worked together to defraud crop insurance companies of funds by filing false loss claims; to defraud the United States government through the filing of false insurance claims ultimately reimbursed by the United States Department of Agriculture; by making material false statements in connection with the Federal Crop Insurance program; and to launder the proceeds and profits of the underlying fraud.
From 1987 to 1992, PRIDGEN was a partner in Beaufort Leaf Tobacco Company, a company formed for the purpose of buying and selling tobacco. In 1992, 1993, and 1998, PRIDGEN was an officer of Tobacco Insurance Agency, Inc., a North Carolina Corporation, formed for the purpose of selling crop insurance.
PRIDGEN and other co-conspirators worked with the farmers to make false crop insurance claims, and to hide some or all of their tobacco production by selling it in nominee names or for cash to co-conspiring warehousemen. The co-conspiring farmer profited under the scheme because he was paid twice for each pound of tobacco: once through the false crop insurance claim, and also through the sale of the “hidden” tobacco. Other co-conspirators profited through other aspects of the double sales scheme, including the original insurance commission, collecting a share of the hidden tobacco's second sale, and profit margins derived from subsequent sales to larger tobacco companies.
PRIDGEN himself bought “hidden” tobacco and sold the tobacco on contracts secured in other conspirators’ names. At the time, PRIDGEN knew those other persons were not, in fact, farming. PRIDGEN used the proceeds from the sale of “hidden” tobacco to pay off farmers and to continue to buy “hidden” tobacco for sale on the false contracts.
PRIDGEN, who has not held a valid insurance license since 1991, sold federal multi-peril crop insurance and private crop hail insurance through The Hallmart Agency, Inc., and received commissions earned on the policies he sold. The commission payments to him were disguised by being paid through business entities in his wife’s name. Between 2003 and 2006, The Hallmart Agency, Inc. paid entities belonging to PRIDGEN and his wife at least $429,790.57.
In total, PRIDGEN received in excess of $647,000 in criminal proceeds from the various fraud schemes.
For the conspirary charge involving false statements, wire fraud and mail fraud, the maximum penalty is up to five years imprisonment followed by up to three years of supervised release and a fine of up to $250,000. For the money laundering conspiracy charge, the maximum penalty is up to 20 years imprisonment followed by up to three years of supervised release and a fine of up to $500,000 or twice the value of the property involved in the transactions, whichever is greater.
There have been 11 other persons charged in connection with the scheme to defraud the Federal Crop Insurance Program. Those defendants have been sentenced or are awaiting sentencing in the upcoming months.
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. This case is being handled by the Office’s Economic Crimes Section. Assistant United States Attorney Banumathi Rangarajan is in charge of the prosecution, and Assistant United States William M. Gilmore assisted in the prosecution.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.
