LEXINGTON, Ky. — A crop insurance agent in Kentucky is facing federal charges alleging she defrauded taxpayers of $169,000 by helping farmers inflate tobacco crop losses and collect insurance money and then helping them sell their burley at market.

The Lexington Herald-Leader reports Debra Muse of Fleming County was indicted recently on one felony count of conspiracy to defraud the United States and 27 felony counts of making false statements on crop-insurance statements and reports.

Muse’s lawyer, John Helmuth of Lexington, had no comment on Monday.

The indictment appears to be the first issued since a federal investigation into crop insurance fraud became public in 2015.

The alleged conspiracy at the heart of that investigation involved central Kentucky tobacco farmers, crop insurance agents, crop insurance adjustors and tobacco warehouse owners/employees.

The investigation became public when federal agents raided tobacco warehouses and other locations in Montgomery County, including one Mount Sterling warehouse where Muse was a seasonal worker.

The fraud detailed in the indictment allegedly occurred in late 2014 and early 2015 when Muse is accused of causing insurance indemnity payments to be made in the amounts of $6,144 to one grower, $139,456 to a second, and $23,651 to a third. The false insurance claims were ultimately reimbursed by the U.S. Department of Agriculture, the indictment says.

The three co-conspiring farmers are identified only by initials and are not named or charged in the indictment.

In each case, Muse caused insurance payments to be paid on claims that “falsely inflated” the amount of tobacco losses the growers suffered, the indictment says.

In addition to her work as a crop insurance agent, Muse had been employed as a seasonal worker since 2001 at Clay’s Tobacco Warehouse in Mount Sterling, which accepts tobacco for purchase and resale.

As part of her responsibilities at the warehouse, Muse was responsible for entering information into a software program that tracks the purchase, sale and shipment of tobacco.

The purpose of the conspiracy was to profit through the filing of false and fictitious insurance claims and the sale of unreported tobacco, the indictment says.

In her capacity as crop insurance agent, Muse obtained crop insurance policies for her client farmers. Those farmers, “at the urging of and with help” from Muse, filed false claims, the indictment says.

“Co-conspiring farmers profited under the scheme because they were paid twice for each pound of tobacco: once through the false crop insurance claim, and also through the sale of the unreported hidden tobacco,” the indictment says.

Muse profited by collecting the original insurance commission and by retaining and expanding the business of her crop insurance clients and securing business for her employer, Clay’s Tobacco Warehouse, the indictment says.

Muse is scheduled to appear in federal court on Oct. 23.


Information from: Lexington Herald-Leader, http://www.kentucky.com