SASKATOON — Recent crop insurance convictions aren’t a sign of increased fraud by farmers, says the manager of the audit department of Saskatchewan’s crop insurance agency.
George Nussbaumer said although it’s difficult to compare fraud from previous years, he estimates the charges are happening at a “similar rate.”
Last year seven crop insurance investigations were turned over to the RCMP by the Saskatchewan Crop Insurance Corp. This year there are four cases under active investigation by police, said Nussbaumer of Melville. About 50,000 farmers in the province hold crop insurance contracts.
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In February, former crop insurance agent Melvin Howard of Hanley pleaded guilty to two charges of crop insurance fraud.
Restitution required
On each of the counts Court of Queen’s Bench Justice J.D. Milliken sentenced Howard to one day in jail (already served) and ordered him to pay restitution.
On the first charge of falsely understating the production of hard red spring wheat, he was ordered to pay back $7,640.46. On the second charge of falsely declaring seeded land as summerfallow, he was ordered to pay back $5,991.65 to the insurance corporation.
In an earlier trial Howard was sentenced to six months in jail for undervaluing the production of his wheat by $4,848.
Charges against his son, Trevor Howard of Dundurn, were stayed.
Understating the amount of grain produced in a crop year to qualify for additional insurance funds is one of the most common means of fraud.
Through its new audits department, the agency has recovered more than $3 million in the one-and-a-half years it’s been operating, said Nussbaumer. That amount doesn’t include money adjusters have recovered through routine audits.
“We encounter many instances of error or overestimating on the part of the producer, or overstating on the part of (SCIC) employees. We have recovered money, all right.”
When the company finds cases of “blatant fraud” the investigation is turned over to the police.
Nussbaumer said if they’re seeing more fraud cases it may be because they are doing more audits with the new department. The company has other options if there is not enough evidence to charge a producer. The audits department can recommend cancelling a producer’s contract. Their department has recommended the board cancel fewer than 10 contracts.
“We try to give the producer the benefit of the doubt as far as possible,” he said.
Jim Findlay, acting director of adjusting services with Manitoba Crop Insurance Corp., said the integrity level of farmers in Manitoba is “quite high.” The company is only investigating three fraud cases of the 12,500 farmers registered with crop insurance and 13,000 holding revenue insurance.
Recently a Manitoba farmer was given a 30-day sentence to be served on an intermittent basis, after pleading guilty to a charge of fraud over $1,000. Findlay said the farmer could have wrongly received $57,000 if the file hadn’t been audited.
“We are looking at anything that appears questionable,” he said.
Alberta Hail and Crop Insurance officials were not available for comment.
