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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.

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.

Data Mining
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.

Results 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.

Major Cases
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.