DENVER – Two southeast Colorado ranchers were sentenced to prison and must pay $6.5 million in fines after pleading guilty to tampering with rain gauges in order to collect crop insurance.
According to the U.S. Attorney’s Office, Patrick Esch and Ed Jagers, of Springfield, Colorado, conspired to defraud insurance programs by making it seem that there was less precipitation in their area than there actually was.
Federal prosecutors said that between July 2016 and June 2017, the pair damaged rain gauges in the region to prevent them from accurately measuring rainfall. Esch and Jagers cut wires on automated rain gauges, some used as official records by NOAA and the National Weather Service. They tipped over some collecting buckets, covered others with pie pans and agricultural disks and plugged another gauge with silicone caulk.
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Esch and Jager then used the false rain records to file crop insurance claims funded by the U.S. Department of Agriculture, according to prosecutors. Insurance programs pay out if there is less than an expected amount of rain in a season or year.
The FBI, Department of Commerce and the Department of Agriculture all investigated the activities. Local media reported that a whistleblower who unsuccessfully tried to blackmail one of the ranchers, alerted officials to the scheme. The estate of the now-deceased whistleblower will get part of the millions in restitution, according to the U.S. Attorney.
“We continue to vigorously investigate those individuals who seek to compromise the integrity of National Weather Service equipment and data in an effort to defraud the Federal Government,” Jeffrey Lysaght, special agent in charge at the U.S. Department of Commerce, said in a statement.
The pair pleaded guilty after being indicted under criminal charges. They will pay $3.1 million in restitution for these charges. Esch was sentenced to two months in prison, while Jager was sentenced to six months. The pair also agreed to pay another $3.5 million to settle civil claims for defrauding the government.
“Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused,” said U.S. Attorney Cole Finegan in a statement. “This case also shows the full measure of justice that can be achieved when our office uses both civil and criminal tools to protect vital government programs.”
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Pam Knox, director of the University of Georgia Weather Network and agricultural climatologist, said this isn’t the first time she’s heard of this type of problem.
“The program was designed by Congress to provide payments to farmers for lost cattle feed if the Drought Monitor (DM) shows a certain number of weeks at a level D2 drought level (severe drought) or higher, and the longer or more extreme the drought is, the higher the payment,” Pam Knox wrote in a blog about the case.
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Knox said in her work that the most common complaint she gets is about the federal payment program for drought impacts on forage from ranchers.
“Several of the (Drought Monitor) authors have told me similar stories of others making up rainfall deficits to try to bump the DM to a higher level,” wrote Knox. “They are well aware of the depths to which people will go to try to get these payments.”
She argues that the Drought Monitor is not designed to show the short-term droughts that usually cause problems for ranchers who need to feed cattle.
“There is frequently a mismatch between what the Drought Monitor is showing and what cattle producers are seeing in their pastures, leading to tremendous frustration on the part of the cattle producers, who desperately want federal payments to help them feed their herds when there is nothing for them to eat,” Knox wrote.