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Member, Beacon International Group, Ltd.
Several Washington potato farmers accused of insurance fraud will have to wait to see just how much hot water they might find themselves in.
The four farmers or potato processors and an insurance agent are accused of conspiring to defraud the Federal Crop Insurance Corp. of nearly $10 million by filing false claims to generate revenue, according to a published report.
Their alleged conspiracy reportedly involved contracts to sell spuds to processors who would process them into potato products rather than sell them whole in grocery stores. The contracts, which were insured, required the potatoes to have a high starch content and be mostly bruise-free.
But the farmers, who have entered not guilty pleas, grew Norkotah Russet potatoes, which are not typically sold for processing. Norkotahs are considered fresh-market produce known for their baking and boiling qualities.
Over several years, the spuds failed to meet the contract requirements, forcing the farmers to sell them elsewhere for a lesser amount. Then they allegedly submitted insurance claims to recoup money for selling them at a loss.
The defendants are alleged to have shared the insurance proceeds with the insurance agent, who is accused of helping them file false claims.
The case will go to trial in the spring.