RMA MAKES PROGRESS AGAINST INSURANCE PROGRAM FRAUD AND ABUSE
WASHINGTON, Dec 23, 2005 - RMA made significant headway during 2005 in
the fight against fraud and abuse in the crop insurance program.
Compliance Highlights for 2005
Spot Check List
RMA is currently completing the 2005 spotcheck list for the 2004 crop year, with
results available by April 2006. The evaluation produced a list of producers
whose patterns appeared atypical compared with others in their region. RMA
compliance offices reviewed the list of names, and dropped and added producers
from the list based on their field observations and other factors. RMA provided the combined list to local Farm Service Agency (FSA) offices and insurance
providers, and FSA conducted growing season inspections based on
their knowledge of producers in their area. FSA sent letters to all producers identified
in the spotcheck process, informing them they were on the list and had been identified for
a growing season inspection.
As a result of this process, RMA statistics show a substantial reduction in
indemnities paid to producers in the year following their spotcheck listing. Producers named
on the 2004 spotcheck list claimed $222 million in 2003
indemnity payments, but only $151 million dollars in 2004 after notification that
their operations were under review. This trend in reduced indemnities has
repeated itself every year for 5 years, indicating there is a sustained impact to
performing the checks on those individuals meeting the spotcheck criteria.
Audits and Investigations
RMA cooperates with the USDA Office of Inspector General on both audits and investigations
related to the crop insurance program. Audit work relates more to
oversight, while investigations work tends to involve identification and prosecution of
criminal behavior. RMA staff provided technical program
details to assist in the investigators' identification of program abuse.
In 2005, RMA began work on several OIG
investigators' cases, which should yield significant
future prosecutions. On the audit side, OIG performed several audits to assist RMA in providing
better program control and oversight.
Working in partnership with the Center for Agricultural Excellence, RMA incorporated the latest
advances in database technology into a single, centralized “data warehouse” of all the crop
insurance-related data in RMA databases over time. Investigators and other RMA staff will use
this centralized data warehouse to search, or “mine,” existing data records to compare policies
and/or detect individual producers whose policies demonstrate atypical patterns, which
sometimes can indicate fraudulent activity. Data mining can also be used to analyze and uncover
larger national patterns that may indicate patterns of fraud, waste, and abuse.
of such data mining techniques allow RMA to quickly focus on the most problematic
areas in the insurance program so they can be investigated and corrected. Before
development of this tool, it was extremely difficult for
RMA to conduct historical research and data analysis, since various data records
were stored in different databases using conflicting data models.
Remote Sensing and Imaging
RMA continues to use remote sensing data and related technologies to support its program
compliance efforts and aid RMA personnel and outside customers working on Agency mission
critical projects. RMA uses remote sensing to identify waste, fraud, and abuse in its
programs using Landsat 5 and 7 data to support investigations of conspiracy, fraud, false
claims, and false statements to the Department of Agriculture.
Based upon the success of using remote sensing in the past, RMA has provided
remote sensing training to a number of its compliance investigators. Investigators are
trained to acquire Landsat 5 and 7 imagery from the USDA Image Archive and make preliminary
determinations either to approve a crop insurance claim, or forward it to a remote
sensing expert for further investigation. Such training has increased RMA image requests
to the USDA Image Archive.
RMA, in conjunction with OIG and the Department of Justice, completed several important
prosecutions in 2005. Sentencing occurred for several parties in the R&V Warren Farms case.
This case drew national attention as the focus of a National Public Radio report in November,
and ended with each of the principals receiving substantial jail terms and fines totaling several
million dollars. Warren case | Kiser case
Other cases against program participants concluded with significant monetary fines and
prison terms in the Midwest, serving as a warning to those who would cheat the
program and the American taxpayer.