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Contact:
John Shea, 202-690-0437

RMA HIGHLIGHTS ADMINISTRATIVE REMEDIES FOR PROGRAM NONCOMPLIANCE

WASHINGTON, Sep 15, 2008 - The Federal crop insurance program, the primary source of risk protection for the Nation's agricultural producers, provided over $88 billion in protection to American producers in 2008 (as of September). Risk Management Agency's (RMA) Federal Crop Insurance Corporation (FCIC), which administers the program, protects the program's integrity through a system of administrative remedies to prevent waste, fraud and abuse. These administrative remedies are applicable to all participants in the Federal crop insurance program.

Administrative remedies are used to protect the government's interest and not for the purposes of punishment. Such administrative remedies include disqualification, civil fine and government-wide suspension and debarment. 7 C.F.R. 400.451-459.

Disqualification - FCIC may disqualify producers, agents, loss adjusters, approved insurance providers, or other persons for a period up to five years that willfully and intentionally provide false information to FCIC or an approved insurance provider with respect to an insurance policy or plan of insurance. Disqualification prohibits the person or entity from receiving any benefit under the Federal Crop Insurance Act as well as certain statutory entitlement programs such as programs administered by the Farm Service Agency. 7 U.S.C. 1515(h).

Civil Fines - For acts occurring after June 23, 2005, FCIC may impose a civil fine for each violation in an amount not to exceed the greater of the financial gain received as a result of the false information provided, or $11,000. 7 U.S.C. 1515(h) as amended.

Imposition of disqualification and civil fines are made by an Administrative Law Judge after notice and opportunity for a hearing.

Suspension - is a temporary action that takes place immediately for a period up to one year or may continue until the completion of an investigation, judicial or administrative proceeding. Suspension is commonly imposed upon an indictment for certain criminal offenses. Such action is taken when it is determined that immediate action is necessary to protect the public interest. 7 C.F.R. 3017.700-765.

Debarment - is an extended action for a period up to three years or longer if circumstances warrant. Debarment is commonly imposed upon the conviction of certain criminal offenses, a judgment in certain civil matters or commission of any offense indicating a lack of business integrity or business honesty that directly affects the present responsibility of a person. 7 C.F.R. 3017.800-890.

Suspension and debarment prohibits the person or entity from selling, servicing, adjusting or acting in any capacity relating to crop insurance policies, or participating in any procurement or nonprocurement activity with any U.S. Government agency. Suspension and debarment affects eligibility for some of the same programs covered by disqualification, plus additional programs, including non-USDA programs. Imposition of suspension and debarment are made by the RMA Administrator as the Suspending/Debarring Official for FCIC.

Names of those persons debarred, suspended or disqualified are listed on a governmentwide Excluded Parties List System (EPLS) through the General Services Administration (GSA). The EPLS is published by GSA and available to the public: https://www.epls.gov/.

Sanctions Imposed - RMA received approximately 295 recommendations for administrative remedies since 2002; listed below are those sanctions imposed during that period.

Sanctions Imposed, 2002-07

Year
Disqual.
Civil fine
Suspension
Debarment
Annual total
2007
1
1
6
5
13
2006
20
10
2
9
41
2005
6
5
3
10
24
2004
13
8
31
15
67
2003
3
4
10
2
19
2002
10
0
9
0
19
Total
53
28
61
41
183

Recent Prosecutions - In order to publicly identify wrongful acts committed against the Federal crop insurance program, RMA posts notices on our public Web site any time the Department of Justice or other law enforcement authority issues a press release on a case involving crop insurance. See the listings of Recent DOJ Prosecutions.