A Kansas farmer has admitted to defrauding federal government crop insurance programs before lying in court documents when filing for bankruptcy.
Trego County farmer Kevin W. Struss pleaded guilty Monday at a federal courthouse in Wichita to one count of federal crop insurance fraud and one count of bankruptcy fraud, court documents show. In the plea deal, prosecutors said they plan to ask the court for more than $2.1 million in restitution.
That total includes more than $600,000 in insurance premium benefits, more than $1.2 million in federal crop insurance premium subsidies and more than $270,000 in administrative costs.
Struss, 63, admitted in the plea agreement that in the spring of 2015 he devised a scheme to defraud the Federal Crop Insurance Corporation. The plan involved making false proof of loss statements that under-reported his total harvested bushels of corn and grain sorghum, which is also known as milo. Those crops had been insured with an FCIC subsidy. As a result of the scheme, he was paid crop insurance benefits to which he was not entitled.
Then in April 2018, Struss filed for bankruptcy. He marked that he had not transferred property to anyone in the previous two years. In fact, Struss admitted in his guilty plea, he had transferred $470,000 to someone else within the three months before he filed for bankruptcy.
Three years of false reports
Though Struss is only charged with crop insurance fraud from the 2015 reports, prosecutors alleged that his scheme to defraud the U.S. Department of Agriculture continued with false reports in 2016 and 2017. The criminal case was filed against the rural WaKeeney farmer earlier this month.
That first year, in 2015, Struss allegedly under-reporting the yields of his corn crop by about 23,524 bushels and his grain sorghum crop by about 31,208 bushels.
The alleged false reports resulted in Struss receiving about $201,000 in federal crop insurance benefits and about $511,000 in federal crop insurance premium subsidies that he was not entitled to. Prosecutors also say the scheme led the Federal Crop Insurance Corporation to pay additional administrative costs to ARMtech Insurance Services that would not have been paid if the reports were accurate.
In 2016, prosecutors alleged, Struss under-reported his corn crop by about 116,194 bushels and sought more than $1.5 million in federal crop insurance indemnification payments to which he was not entitled. The claim was denied by Rural Community Insurance Services.
Federal court records show that Struss sued Rural Community Insurance Services in April 2018 in relation to his 2016 corn crop. That case is in arbitration. In a separate case filed that same month, Struss sued the USDA, Risk Management Agency and Federal Crop Insurance Corporation, also in relation to his 2016 corn crop. A federal judge in Kansas City ruled in favor of the government agencies this summer.
In 2017, prosecutors alleged, Struss under-reported his sorghum crop by about 35,530 bushels, causing Farmers Mutual Hail Insurance Company to pay him more than $108,000 in benefits to which he was not entitled.
Prosecutors alleged in the bankruptcy fraud charge that Struss lied in his petition for Chapter 11 bankruptcy in April 2018 because he had wired $470,000 to Kellie Acker in the previous months. A pair of online obituaries show Acker was Struss’s sister-in-law in 2015 and was his fiance in 2018.
Sentencing is scheduled for Jan. 15. On the crop insurance fraud charge, Struss faces up to 30 years in federal prison and a fine of up to $1 million. On the bankruptcy fraud charge, he faces up to five years in federal prison and a fine of up to $250,000