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Justice News

Department of Justice
U.S. Attorney’s Office
District of North Dakota

FOR IMMEDIATE RELEASE
Thursday, December 11, 2014

Johnson Brothers Found Guilty of Conspiracy to Commit Fraud

Fargo – U.S. Attorney Timothy Q. Purdon announced that on December 11, 2014, a Federal Trial Jury found Aaron A. Johnson and Derek M. Johnson, guilty on charges of conspiracy to commit fraud in connection with Federal Crop Insurance and Federal Crop Disaster Programs; making false statements to the United States Department of Agriculture, acting through the Risk Management Agency (RMA); and, making false statements to federal law enforcement authorities. The two brothers farmed potatoes near Northwood, ND from at least as early as 2002 until about January 20, 2010, and thereafter. The guilty verdicts were returned at the conclusion of a two week jury trial.

The brothers’ scheme involved intentionally destroying and damaging potato crops, in order to obtain federal crop insurance indemnities and federal crop
disaster benefits, over a period of years. As part of the scheme, the brothers intentionally poisoned their potato seed during planting. They intentionally destroyed or neglected their growing crops in the field and intentionally destroyed potatoes in storage. The brothers applied concentrated nitrogen fertilizer and septic system products such as Rid-X and Flush to their potato seed prior to planting; they intentionally destroyed their growing potatoes using cultivator equipment; intentionally left potatoes in the field during harvest. They added septic system products such as Rid-X and Flush to water and sprayed it on top of potatoes in storage; purchased and resold unused farm chemicals that were intended to protect the crop but never used; they sprayed water on fields in order to fool neighbors and others into thinking they cared for the crop; they added frozen potatoes to the top of the stored potato pile and used a portable heater to increase warehouse temperatures in order to regulate the rate of potato Soft Rot; they did all of this in advance of filing claims for lost potato production and stored potato crops over a period of years. The brothers and their farming operations received millions of dollars in federal crop insurance indemnities, subsidized crop insurance premiums and federal disaster benefits.

The Johnson brothers face up to 30 years in prison and millions of dollars in fines, restitution and criminal forfeiture. The Honorable Chief Judge Ralph R. Erickson has set sentencing hearing and forfeiture hearings for both defendants beginning March 9, 2015, at 1:30 pm in United States District Court in Fargo, ND.

The case was investigated by the United States Department of Agriculture and the Risk Management Agency

Assistant U.S. Attorney Clare Hochhalter and AUSA Nick Chase prosecuted the case.

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Updated February 4, 2015