Mich. Farmer Settles Fraud Allegations

LINCOLN, Neb. (DTN) -- A southwest Michigan farmer will pay $87,500 to resolve allegations that he violated the False Claims Act by obtaining federal crop insurance and farm benefits for crops he allegedly did not farm, according to the U.S. Attorney for the Western District of Michigan.

U.S. Attorney Mark Trotten said in a news release on Tuesday that Niles, Michigan, farmer David G. Zelmer owned and farmed land in Berrien County but entered into a lease agreement with another farmer in 2015.

As part of that lease agreement, Zelmer leased certain tracts of that land to the other individual to farm, according to the U.S. attorney. The lease agreement continued through 2017.

"The United States alleges that, despite leasing those farm tracts to the other farmer, Zelmer certified that he was the sole producer of the crops on those farm tracts when seeking benefit payments from the FSA in crop years 2015, 2016 and 2017, when he was not," the U.S. attorney said in the news release.

In addition, the U.S. attorney alleged that Zelmer certified that he was the sole producer of the crops on those same farm tracts when obtaining federal crop insurance coverage from the Federal Crop Insurance Corporation, although he was not.

Zelmer has received about $2.2 million in farm subsidies from 1995 to 2023, according to the Environmental Working Group's farm subsidy database, the second highest in the Niles, Michigan, region.

Zelmer did not immediately respond to DTN's request for comment.

The U.S. attorney said the resolution obtained with Zelmer was the result of a "coordinated effort" between the U.S. Attorney's Office for the Western District of Michigan and USDA's Office of Inspector General and the Risk Management Agency. Assistant United States Attorney Andrew J. Hull prosecuted this case.

The U.S. attorney said the claims resolved by the settlement are "allegations only," and there has been no determination of liability.

"Michigan farmers depend on federal programs to provide economic security," Totten said in a statement. "But the wellbeing of these programs depends on farmers telling the truth and playing by the rules. My office is committed to working with our law enforcement partners to investigate allegations of false claims to these federal programs."

Shantel R. Robinson, special agent in charge at the USDA's OIG, said the agency is "committed to combatting crop insurance fraud" through civil enforcement under the False Claims Act.

"Fraudulent activity within the crop insurance program undermines its intent and misdirects taxpayer dollars from which they were intended. We are thankful to the U.S. Attorney's Office and USDA's Risk Management Agency for their partnership on this joint investigation and OIG will continue its mission to investigate allegations of waste, fraud and abuse in USDA programs."

Todd Neeley can be reached at todd.neeley@dtn.com

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