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Insurance agency, CEO ordered to pay $500,000 settlement

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Insurance agency, CEO ordered to pay $500,000 settlement

A crop insurance company and its CEO have agreed to pay $500,000 to settle allegations that they violated federal laws by facilitating the submission of fraudulent claims for federal crop insurance.

Silveus Insurance Group (SIG) also agreed to enter into a one-year monitoring period with the US Department of Agriculture’s Risk Management Agency. In addition, company chief executive James Cameron Silveus agreed to a voluntary exclusion from federal programs through March 01, 2023.

According to a release from the US Attorney’s Office of the Western District of Michigan, Silveus – through SIG – served as the crop insurance agent for Michigan-based crop farmer Gaylord Lincoln. In December 2021, the US federal government filed a complaint in the US District Court for the Western District of Michigan, which alleged that Lincoln violated the False Claims Act through a scheme to obtain more federal farm benefit program payments than he was entitled to.

The federal government purported that Lincoln placed some of his farmlands and crops under the names of farmhands who served as “straw” farming operators who answered to him, and were allegedly also ordered to fraudulently obtain federal crop insurance policies to which they were not entitled.

The federal government also alleged, separately from the lawsuit, that Silveus and SIG – acting under the direction of Lincoln – obtained federal crop insurance policies for the straw farming operators and also submitted the false claims on behalf of the operators. It was purportedly due to these false claims that the Federal Crop Insurance Corporation paid subsidy premiums and indemnities on the false policies, in addition to paying administrative costs to Silveus and SIG.

“The federal crop insurance program is designed to promote the national welfare by creating economic stability for farmers,” said US Attorney Andrew B. Birge.  “This system relies on producers and their insurance agents to submit truthful and complete information, and my office is committed to investigating any allegations of fraud on the federal crop insurance program.”

The US Attorney’s Office stressed that the claims against Silveus and SIG resolved by the settlement are only allegations and that there has been no determination of liability.

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