Federal Investigators Bust up $100 Million Insurance Fraud Ring

ParkmanLawFirm
March 20, 2013

Forty-one defendants have either pleaded guilty or reached plea agreements in a massive insurance fraud scheme attempting to steal at least $100 million from the government-backed program that insures crops. Authorities believe this is already the largest such ring uncovered in the country which included dozens of insurance agents, claims adjusters, brokers, and farmers in North Carolina. Investigators say the guilty parties profited from false insurance claims on losses of tobacco, soybeans, wheat and corn. Often, the crops weren’t damaged at all, with the farmers using aliases to sell their written-off harvests for cash.

Prosecutors compared the case to the busting of a drug cartel, where investigators used a confidential informant to catch a key participant in this sophisticated fraud, who then agreed to implicate others. That first wave of prosecutions led to still more names to investigate.

Those prosecuted in North Carolina raked in millions of dollars without detection until 2005 when USDA auditors used computer software to mine insurance claims data from across the country for outliers. Among the named identified was a Wilson crop insurance agent named Robert Carl Stokes, whose clients appeared to have consistently horrible luck. Through the prosecution of Stokes and his immediate co-conspirators, authorities were led to dozens of others involved in similar frauds throughout eastern North Carolina. The USDA’s Office of Inspector General said the recent string of crop insurance fraud convictions in eastern North Carolina eclipses similar investigations anywhere else in the United States.

Charged with 14 felony counts, Stokes pleaded guilty to two counts of conspiring to make false statements and to commit money laundering in 2011. He has been sentenced to 30 months in prison and also agreed to pay more than $16.5 million in court-ordered restitution.

Stokes was released last month from a West Virginia federal penitentiary and is back in Wilson wearing an electronic ankle bracelet that allows federal authorities to track his movements. He declined to comment on his conviction citing the three years left of probation remaining on his sentence. Now 62, and unemployed, he is paying $200 each month toward the millions of dollars he still owes in restitution.

If you find yourself facing fraud charges, it is important to find an experienced insurance fraud attorney to represent you. The white collar criminal attorneys of Parkman & White, LLC have a history of success in the court room and are ready to represent clients nationwide.