Insurance Journal Reports Satellite Images Used to Detect Crop Insurance Fraud

January 12, 2006

Satellites have been connected with space explorations, monitoring crop conditions around the globe, helping commodities markets price the product and more.

Few of us think of satellite images showing up in courtrooms to help prosecutors prove crop insurance fraud. Times have changed. Now the Agriculture Department’s Risk Management Agency is using the technology to identify and prosecute farmers involved in crop insurance fraud.

Over eight-day intervals, satellite technology is used to monitor when a farmer plants his acreage, irrigation methods, and what crops he decides to grow. If changes or suspicious images are found in a farm’s insurance claim, investigators review satellite photos dating back years to determine cropping practices on individual fields.

The largest case of insurance fraud was in North Carolina where a tomato farmer and his wife were involved in a crop fraud scheme at the tomato growing farms of Robert and Vicki Warren. Eight people were convicted. In September, Robert Warren was sentenced to 76 months in prison, his wife to 66 months. They were also ordered to forfeit $7.3 million and pay $9.15 million in restitution. Satellite imaging was used during the trial, helping the Agency to nail down the convictions, according to the Associated Press.

A Kansas State University agricultural economist sent out an email warning farmers on his distribution list about the growing use of this technology in court room situations. His comment was he wanted to alert farmers saying that it keeps “honest people honest.”

Less than 100 cases have been prosecuted using satellite imaging since the agency started its congressionally mandated crackdown. Approximately 1,500 farms annually are put on a watch list for possible crop fraud. Producers are notified they are being watched and ground inspections are done on the suspect farms throughout the growing season.

The agency’s spot checklist in the first year generated by the satellite data saved taxpayers an estimated $72.2 million in fraudulent crop insurance claims. In 2002 the savings was $110 million. The agency estimates it saved $81 million in 2003 and $71 million in 2004 just on those 1,500 suspect farmers singled out each year.
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