By Nancy Allen
Insurance agents James Fennig, 1456 St. Anthony Road, Coldwater, and Mark A. Homan, 1754 St. Johns Road, Maria Stein, have been charged with one federal count each of conspiracy to commit crop insurance fraud, an attorney with the United States Attorney's Office said this morning.
The two could face a minimum of probation to a maximum of five years in a federal prison. Their sentences will be determined when they are sentenced, based on factors that the judge will consider, said U.S. Assistant Attorney Thomas Karol this morning.
Both were insurance agents with the Fennig Insurance Agency in Mercer County, court documents indicate.
Neither Fennig, 61, or Homan, 48, could be reached for comment this morning.
The Daily Standard first learned the United States Department of Agriculture (USDA) was investigating the pair in September 2000, after federal agents carried out search warrants at several farms and insurance offices in Ohio and Indiana.
For a September 2000 story in The Daily Standard, a few anonymous Mercer County farmers said the investigation concerned discrepancies in the yield amounts farmers reported on federally insured crops.
Documents filed at U.S. District Court in Toledo state that on or about March 2003, Homan and Fennig knowingly and willfully conspired and agreed together to commit certain offenses against the United States by making false statements and reports on applications for crop insurance for the purpose of influencing the action of the Federal Crop Insurance Corporation and companies the corporation reinsures.
When asked why the investigation began in 2000 but the charges are for incidents in 2003, Karol would not comment.
Part of the conspiracy was that Homan and Fennig would backdate crop insurance applications, have applicants sign blank or incomplete documents pertaining to crop insurance and create or have created false actual production histories, court documents state.
The Federal Crop Insurance Corporation (FCIC) is a federally-subsidized program administered and delivered through FCIC and private insurance companies. FCIC contracts with private insurance companies to sell, service and settle claims of crop insurance.
To get crop insurance, farmers complete an application through a licensed insurance agent. At that time, the farmers selects the coverage level, price election, crops, county and state for the insurance coverage. Once the application process is completed, the policyholder either accepts a production history for the insured crop based on assigned USDA-established yield for the crop and county of production, or the policyholder certifies at least four years of actual or assigned yields for actual production history or the insured crop.
The policyholder is eligible for a crop insurance indemnity payment if he sustains production losses at any time during the crop year.
The signup period to apply for crop insurance for calendar year 2003 officially ended March 17, 2003, after which no applications for 2003 crop insurance would be accepted.
Court documents said to achieve the objects of the conspiracy, the following acts were committed:
On or about March 14, 2003, a purported crop insurance applicant met with Homan to discuss applying for crop insurance. At the meeting, Homan told the applicant he and Fennig were very busy and that he would meet again with the potential applicant after the signup period was over.
On or about March 21, 2003, after the closing date to sign up for crop insurance had passed, an individual met with Homan and Fennig to obtain crop insurance for 2003. Homan and Fennig had the individual sign a crop insurance application, after which Fennig signed and backdated it to March 17, 2003.
On or about March 25, 2003, the individual telephoned Fennig Insurance Agency and provided the social security number of his purported spouse, and the number was put on the backdated crop insurance application.
In or about March 2003, Homan and Fennig submitted the application to Heartland Crop Insurance, Inc., an insurance company that is reinsured by the Federal Crop Insurance Corporation.
Karol this morning also said he was not aware of any other investigations of local farmers facing crop insurance fraud. He said the investigation of Fennig and Homan is complete.