Kent Pfaff, Crop Insurance Fraud, North Dakota 2023

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Defendant Sentenced to 3 Years for Crop Insurance Fraud

BISMARCK – In a major blow to crop insurance fraudsters, U.S. District Court Judge Daniel L. Hovland sentenced Kent Pfaff, 60, of Washburn, North Dakota, to three years of supervised release and ordered him to pay $379,317.00 in restitution to the United States Department of Agriculture (USDA).

According to court documents, Pfaff pleaded guilty on December 20, 2023, to a charge of False Statement to Influence the United States Department of Agriculture – RMA, colloquially known as ‘crop insurance fraud.’

As part of the plea agreement, Pfaff voluntarily agreed to be excluded from receiving benefits from any federal procurement transaction authorized or funded by the USDA for a period of five years.

During farm year 2019, Pfaff severely understated his soybean production yield numbers to his crop insurance providers to falsely increase his crop insurance indemnity payments. Insurance adjusters discovered that the appraised soybean yield amounts were actually between four to five times higher than what Pfaff reported to his insurance company, the Risk Management Agency (RMA), and the Federal Crop Insurance Corporation (FCIC).

Agents from the United States Department of Agriculture – Office of Inspector General and the Special Investigations Staff of the Risk Management Agency uncovered evidence that Pfaff was ‘shifting production,’ a fraud scheme where a person will overreport production from one or more fields and underreport production from one or more different fields to manufacture or inflate claims to which they are not entitled.

‘This result protects the integrity of the federal crop insurance program,’ U.S. Attorney Mac Schneider said. ‘The United States Attorney’s Office and federal law enforcement will aggressively pursue fraud to protect honest producers and American taxpayers.’

This case was investigated by the United States Department of Agriculture – Office of Inspector General and the Special Investigations Staff of the Risk Management Agency – United States Department of Agriculture. Assistant U.S. Attorney Jonathan J. O’Konek and Assistant U.S. Attorney David Rappenecker prosecuted this case.