Posted April 22, 2014
 
Federal prosecutors have expanded the allegations against two North Dakota potato growers, saying they added chemicals to potato seeds to damage production in a crop insurance fraud case, according to an article by AgWeek available here.  The Associated Press also reported on the story here.
 
Brothers, Aaron Scott Johnson and Derek Martin Johnson are pleading not guilty to the allegations that they took $2 million from fraudulent insurance claims and federal disaster funds since 2002.
 
The trial is set for July 15 in Fargo, ND.  
 
In the indictment, federal prosecutors allege that from 2002 to Jan. 2010, the Johnsons and the Johnson Potato Co. “fraudulently obtained crop insurance benefits from an unnamed crop insurance company and the Risk Management Agency/Federal Crop Insurance Corp.”  The Johnsons received indemnity payment of more than $2 million in addition to the disaster payments of $159,000.
 
Prosecutors allege that the Johnsons falsely reported that the crop damage was from “soft rot,” when they actually “conspired to ensure” that their production “sustained physical damages and losses to their potato crop.”  Prosecutors say the Johnsons “added chemicals to the potato seeds to damage the seeds so that the potato plants would not produce potatoes.” 
 
Prosecutors also allege that they “applied chemicals including Rid-X” and added “spoiled and frozen potatoes to their stored (and otherwise undamaged) potato crop, “causing the stored potatoes to deteriorate and rot.”  In addition, prosecutors allege that the Johnsons placed heaters in the warehouse to accelerate spoilage. 
 
Aaron Johnson was previously convicted of converting Commodity Credit Corp. property and was sentenced to restitution and three years’ probation in 1995.

 

For more information on crop insurance and disaster assistance programs, please visit the National Agricultural Law Center’s website here.