Michael McNew, Crop Insurance Fraud, Kentucky 2022

Grimy Times – LEXINGTON, Ky. – In a shocking case of crop insurance fraud, Michael McNew, a former crop insurance agent from Mt. Sterling, was sentenced to 86 months in federal prison for conspiracy to commit wire fraud. McNew’s scheme involved inflating or fabricating the damage to crops and falsifying the number of acres of crop planted when preparing adjustments on claims of loss on federal Multi-Peril Crop Insurance policies.

McNew, 51, was a crop insurance adjuster until 2012, when he became a crop insurance agent. According to his plea agreement, he agreed with agricultural producers to inflate or fabricate the damage to their crops and falsify the number of acres of crop planted when preparing adjustments on their claims of loss on federal Multi-Peril Crop Insurance policies. As an insurance agent, he admitted to committing fraud on MPCI claims of loss, as well as private claims of loss to his contracted employer, ARMtech Insurance Services.

In total, McNew admitted to causing a total loss of more than $23,000,000. His sentence of 86 months in federal prison is a significant blow to those involved in crop insurance fraud. Under federal law, McNew must serve 85 percent of his sentence, while his co-defendant, Roger Wilson, must serve his entire sentence.

Roger Wilson, an 88-year-old resident of Mt. Sterling, was also sentenced to 12 months in federal prison for conspiracy to commit crop insurance fraud. Wilson owned Clay’s Tobacco Warehouse, a tobacco warehouse, grading station, and auction house in Mt. Sterling, Kentucky. He admitted to arranging for farmers to purchase poor quality tobacco, so they could use this tobacco to get fake grades to apply to their insurance claims of loss, which resulted in inflated indemnity payments.

Wilson produced fake sales receipts, shipping reports, and bale tags, all in efforts to facilitate fraudulent crop insurance claims of loss. These documents showed that Wilson was responsible for over $9,000,000 in losses to the federal government. Wilson’s restitution order is still pending before the Court.

McNew pleaded guilty in October 2020, while Wilson pleaded guilty in May 2021. The investigations were conducted by the United States Department of Agriculture Office of Inspector General, the United States Department of Agriculture Risk Management Agency Special Investigations, the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Kentucky Department of Insurance Fraud Investigation Division.

McNew must also pay restitution of $19,596,936. This case marks a significant victory in the fight against crop insurance fraud, a crime that can have devastating effects on the agriculture industry and the economy as a whole.

Other recent crop insurance fraud sentencings have resulted in the following sentences: Ronnie Jolly, 50, of Paris, Ky., was sentenced on August 13, 2021, to 36 months in prison and five years of supervised release; Bradley Price, 38, of Carlisle, Ky., was sentenced on August 20, 2021, to 30 months in prison and three years of supervised release; Brandon Price, 30, of Paris, Ky., was sentenced on August 20, 2021, to six months in prison and three years of supervised release; and Jimmy Price, 61, of Carlisle, Ky., was sentenced on August 20, 2021, to six months in prison and three years of supervised release.