Prosser-Bauer charged with wheat insurance fraud

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A Prosser farmer is charged with fraud for raising tens of thousands of dollars in hidden wheat sales while collecting crop insurance.

A Prosser farmer is accused of raising tens of thousands of dollars in hidden wheat sales while collecting crop insurance for alleged losses.

Rick T. Gray and his company, Gray Land and Livestock LLC, were recently sued by the federal government over the multi-year program that includes wheat growing operations in Klickitat County.

He reportedly received more than half a million dollars in crop insurance reimbursements.

The civil enforcement action alleges Gray defrauded the federally backed program designed to help farmers across the country from April 2015 to February 2019.

The 41-page complaint filed in the US District Court in the Eastern District of Washington leads to eight charges against Gray and his company.

These charges include: violating the false claims law; false claims submitted to the Federal Crop Insurance Corporation (FCIC); Postal fraud; Wire fraud; Bank fraud; unjustified enrichment; and for erroneous payment.

In the lawsuit, federal prosecutors state that Gray hid or did not disclose wheat sales, while falsely claiming a loss of wheat production.

“Under the False Claims Act, Mr. Gray and his company face triple damages for all fraudulent losses in the United States – over 1.6 million and the Recovery Enforcement Act (FIRREA),” the Justice Department said in a press release.

Wheat production “hidden”

In 2015, Gray allegedly withheld more than half of the wheat production of the companies he owned or controlled.

He falsely claimed that these companies only sold 21,000 bushels of wheat for about $ 130,000, although his companies also sold over 35,000 bushels of wheat for an additional $ 184,000 in hidden and undisclosed wheat sales, the DOJ press release said .

“As claimed, Mr. Gray’s false statements earned him and the companies he owned and / or controlled at least $ 540,028 in insurance compensation for 2015.”

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Charlie Riedel, file AP photo

Prosecutors say Gray attempted to carry out the same plan in 2016, but his plans were foiled by claims adjusters and the US Department of Agriculture “before he again fraudulently received fake crop insurance default payments.”

According to records from the USDA’s Farm Services Agency, Gray and his companies held the largest insured wheat acreage in Klickitat County, west of Prosser, between 2014 and 2016.

The county had an average of nearly 100 wheat farms in each of those years.

Bankruptcy petition

Online state records show that Gray Land and Livestock was administratively disbanded this February.

The civil lawsuit states that after the fraudulent scheme for this company was uncovered, Rick Gray filed for bankruptcy, leaving Columbia State Bank’s creditor with more than $ 3.5 million in outstanding claims.

Another company, Gray Farms and Cattle Co. LLC, defaulted with Washington State in 2020 and was dissolved in April, according to online records.

The Washington Secretary of State’s website reveals that he still has Gray Holdings LLC, which is listed as a property management company.

The case is being handled by the federal prosecutor’s office with the assistance of the Office of Inspector General and the Risk Management Agency of the US Department of Agriculture.

It was assigned to Judge Thomas O. Rice.

The Federal Prosecutor’s Office has requested a jury trial. No date has been set yet.

Kristin M. Kraemer deals with justice and crime issues for the Tri-City Herald. She has worked as a journalist in Washington and California for more than 20 years.


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