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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Kentucky

Tuesday, February 2, 2016

Monroe County, Kentucky, Tobacco Farmer Sentenced To Prison Term For Crop Insurance Fraud

Ordered to pay restitution in the amount of $711,958.00

BOWLING GREEN, Ky. - A Monroe County, Kentucky tobacco farmer was sentenced by United States District Judge Greg N. Stivers, to serve eight months in prison followed by a three year term of supervised release and ordered to pay restitution in the amount of $711,958.00 for committing crop insurance fraud, announced United States Attorney John E. Kuhn, Jr.

Tracy E. Dillard, 45, of Fountain Run, Kentucky, aided and abetted by others, previously admitted in court of knowingly making false statements and reports on insurance claims submitted to Producers Agriculture Insurance Company, a company insured by the Federal Crop Insurance Corporation (FCIC).

“The federal crop insurance program ultimately exists to provide a safety net for our farming community,” stated Acting U.S. Attorney John Kuhn.  “Fraud undermines the entire program.  This U.S. Attorney’s Office is committed to working with our partner federal agencies to ensure that every penny of taxpayer money is fully restored.”

The violations occurred between 2009 and March 10, 2011, in the Western District of Kentucky, including Allen, Barren, Hart and Monroe Counties in Kentucky, and Macon County in Tennessee.

Specifically, in 2009 Dillard had four separate crop insurance policies on four different crops, two in Barren County, and two in Monroe County.  Aided and abetted by others, Dillard intentionally overstated crop damage for each crop by forty percent (40%) on a crop insurance claim form, resulting in a loss of $125,339.20.

Additionally, in 2010 Dillard had twelve separate tobacco crop insurance policies on twelve different crops.  Dillard, aided and abetted by others, intentionally overstated crop damage by forty percent (40%) for each crop on a crop insurance claim form, resulting in a loss of $504,454.80.

Finally, in 2011 Dillard had a crop insurance policy on a crop located in Allen County.  Aided and abetted by others, Dillard intentionally falsified the crop plant date on a crop insurance claim form, resulting in a loss of $82,164.

The FCIC indemnifies insurance companies for crop insurance claims.

For the 2009, 2010, and 2011 policies listed above, Dillard caused fraudulent claims to be submitted to the United States government, through claims made to ProAg and paid by the FCIC, resulting in a $711,958 loss to the United States. Dillard agreed to pay full restitution under the terms of his plea agreement.

This case was prosecuted by Assistant United States Attorney David Weiser and was investigated by the United States Department of Agriculture (USDA) Office of Inspector General (OIG) and the Risk Management Agency, Special Investigation Branch.

Financial Fraud
Updated February 3, 2016