United States 

Department of 

Agriculture

Risk 

Management

Agency

Risk Management Agency

Program Compliance and Integrity

Annual Report to Congress

January - December 2004

PREVENTING FRAUD. PROTECTING AGRICULTURE.
Note: Use of brand or firm names in this publication does not imply endorsement by the U.S. Department of Agriculture

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, 

color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, 

sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual’s income is derived 

from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require 

alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s 

TARGET Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination write to:

USDA

Director, Office of Civil Rights

1400 Independence Avenue, S.W.

Washington, D.C. 20250-9410 

or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). 

USDA is an equal opportunity provider and employer.

Issued December 2007
 Program Compliance and Integri     Annual Report to Congress January-Decemb0

United States 

Department of 

Agriculture

Risk 

Management

Agency

Risk Management Agency

Program Compliance and Integrity

Annual Report to Congress

January - December 2004

Contents

Preface...................................................................................ii

Executive Summary..............................................................iii

Oversight................................................................................1

New Standard Reinsurance Agreement ....................................................1

Operations Reviews .................................................................................3

Technology.............................................................................4

Scoring and Prioritization System ............................................................4

New Case Management System - Magnum .............................................5

Data Mining and Warehousing ................................................................5

Remote Sensing and Imaging ................................................................10

Collaboration........................................................................11

High-Profile Collaborative Investigations...............................................11

Results .................................................................................21
ii risk management agenc

The United States Department of Agriculture’s 

(USDA) Risk Management Agency (RMA) administers 

the Federal crop insurance program, the primary source 

of risk protection for America’s farmers and ranchers. In 

2004, 221 million insurable acres of the Nation’s farmland 

were protected by Federal crop insurance. RMA provided 

$46.6 billion of coverage to American farmers and ranchers. 

Insurance premiums for 2004 totaled $4.18 billion, 

compared to indemnity payments of $3.20 billion received 

for crops damaged by natural causes or lost revenue due to 

price fluctuations. To ensure that the cost to producers and 

taxpayers continues to be justified, it is essential that there 

be adequate safeguards in place to avoid or correct abuses.

The Agricultural Risk Protection Act of 2000 (ARPA) 

enhanced the incentives for producers to buy higher levels 

of coverage, creating a more effective safety net. ARPA also 

provided USDA with new requirements and new tools for 

monitoring and controlling program abuses. It required 

RMA and the Farm Service Agency (FSA) to strengthen 

local-level oversight by working together and sharing 

information through compatible yield data and production 

databases. ARPA provided for the use of data mining as a 

technologically advanced tool for more efficiently targeting 

compliance reviews and investigations. It also increased 

sanctions that can be imposed for program fraud and abuse. 

This fourth annual report, as required under the Federal 

Crop Insurance Act (7 U.S.C. sec.1515), documents 

USDA’s progress toward implementing these new tools, 

and their effectiveness. It provides information on how 

the program is monitored for compliance and describes the 

steps taken to improve the way compliance detection and 

enforcement activities are conducted. The report shows how 

data mining and other tools are being used in identifying 

areas of potential abuse. It also demonstrates that USDA 

is becoming steadily more successful at discovering and 

preventing fraud, waste, and abuse.

As indicated in the report, the continued effectiveness 

of compliance-related efforts has raised the level of 

avoided costs, saving the Government $78 million in 

fraudulent or other incorrect payments that might not 

have otherwise been identified until after the fact. A strong 

contributing factor in the growing success of the program 

is the collaboration and partnership among departmental 

agencies in compliance investigations. This includes the 

highly effective collaboration between FSA and RMA to 

develop procedures for referrals of suspected abuse from 

FSA field offices directly to RMA field offices. USDA is 

fully committed to preserving the integrity of the Federal 

crop insurance program and expects to report continued 

progress toward that goal in future reports.

 Charles F. Conner

 Acting Secretary of Agriculture

Preface
 Program Compliance and Integri     Annual Report to Congress January-Decemb04 

The United States Department of Agriculture’s 

(USDA) Risk Management Agency (RMA) is dedicated 

to safeguarding the integrity of America’s agricultural 

community by implementing the best and most innovative 

methods to detect, deter, and prevent fraud, waste, and abuse 

within the Federal crop insurance program. Each year, RMA 

works toward this important mission by creating targeted 

methods to strengthen program integrity, make innovative 

technological innovations, and improve collaborative work 

with its partners in the anti-fraud alliance, the Farm Service 

Agency (FSA), the Federal Crop Insurance Corporation 

(FCIC), and Approved Insurance Providers (AIP). This 

annual report will highlight the progress RMA has made in 

these areas in 2004.

This marks the fourth year this report has been issued, as 

required by Section 515(i) of the Federal Crop Insurance 

Act (7 U.S.C. sec. 1515) (the Act) entitled “Program 

Compliance and Integrity.” The Act, as amended by ARPA, 

mandates that RMA report on compliance with the Act by 

describing the methods employed to minimize fraud, waste, 

and abuse within the Federal crop insurance program. As 

such, this report highlights specific cases of fraud, waste, 

and abuse and the specific actions RMA is taking to address 

them. Also discussed are key collaborative efforts, specified 

by the Act, between RMA, FSA, and the AIPs, as well as 

with State insurance commissions, U.S. Attorneys Offices, 

the Office of Inspector General (OIG), and other agencies 

within USDA to combat fraud and strengthen program 

integrity. This report includes the most recent data available 

and covers January 1 - December 31, 2004.

RMA has made a number of significant steps to 

strengthen program integrity and fight fraud, waste, and 

abuse. Considerable success has been achieved as a result. 

Among the many accomplishments in 2004:

Developed stronger program oversight tools that 

will allow RMA greater flexibility in monitoring the 

fiscal health and operational functions of AIPs;

Implemented new technology and developed innovative 

approaches to help RMA staff and partners conduct 

their work more efficiently, including the completion of 

a new case-management system for RMA Compliance 

staff, and development of an information management 

system that will improve the efficiencies of data exchange 

and reconciliation between RMA, FSA, and AIPs;

Strengthened collaborations with FSA, AIPs, State 

Insurance Commissions, OIG, and other partners who help 

RMA in its mission to strengthen program integrity; and

 Achieved impressive results and savings in cost 

avoidance and recoveries. The results of these 

accomplishments have been significant, producing an 

estimated $78 million in cost avoidance and $37 million 

in findings and other recoveries in 2004.

RMA’s efforts to fight fraud and improve program 

integrity have achieved impressive results. The new 

tools and approaches RMA developed and implemented 

in 2004 to protect the livelihood of agricultural producers 

and the integrity of the crop insurance program are having 

a decidedly positive impact. They are allowing RMA to 

fight fraud, waste, and abuse ever more effectively, and 

are bringing substantial savings to the USDA, the U.S. 

Government, and the American taxpayer.

In the pages that follow, more detailed descriptions of 

some of the projects RMA has focused on during the 2004 

calendar year are provided.

Executive Summary
Today’s Federal crop insurance program is a unique 

public/private collaboration among Federal agencies. It 

is a unique hybrid of Federal administration and privateinsurance-company delivery of risk management products 

and services to the American farmer. In 2004, there were 

15 FCIC-approved AIPs delivering crop insurance across 

America. These AIPs share in the risk and compete for 

business; yet they operate under the rules and conditions 

set forth in a Standard Reinsurance Agreement (SRA) 

that each AIP signs with FCIC. FCIC is a Government 

corporation managed by RMA. In 2002, the largest 

company in the program at the time (American Growers 

Insurance Company) was placed under regulatory control 

by a State Insurance Commission due to its poor financial 

condition. The policies of thousands of farmers were 

at risk. RMA funded the dissolution of the company 

to ensure that policyholders were protected and that 

producers’ claims were paid. In 2004, RMA implemented 

critically important changes to the SRA that will greatly 

reduce the risk of a similar event occurring in the future 

and thereby reinforcing and strengthening program 

integrity through stronger controls and greater oversight. 

Further, RMA implemented a new plan for verifying 

compliance with certain aspects of the new Agreement, 

titled Operations Reviews. Operations Reviews assess 

the AIPs’ compliance with the terms and conditions of the 

SRA and FCIC-approved policies and procedures in the 

delivery of the Federal crop insurance program.

New Stan

During 2004, RMA and the AIPs entered into a renegotiation 

of the SRA that lays out the terms and conditions between 

the U.S. Government and AIPs in the delivery of the 

Federal crop insurance program. The changes agreed upon 

in 2004 went into effect with the 2005 reinsurance year 

(July 2004).

The 2005 SRA contains requirements that AIPs must 

report projected expenses and underwriting gains. It gives 

RMA the authority to obtain relevant information to 

review financial operations of holdings and providers for 

notification not only of planned acquisitions, but of any 

change in the business organization, operations, finances, or 

sales expectations of the AIP or its service partners. Many 

other areas of the SRA were also strengthened to provide 

RMA more latitude in collection and analysis of financial 

and operational information of the AIP and its affiliates.

Procedures for financial analysis of new reporting 

requirements include additional historical information and 

analytical tools (e.g., risk-based capital, maximum probable 

loss, etc.)

Specific requirements of the new SRA state that an 

AIP will have the financial and operational resources, 

organization, experience, internal controls, and technical 

skills to meet the requirements, and that the AIP will provide 

information necessary to evaluate compliance as often as 

required by RMA. The AIP must be able to demonstrate 

a satisfactory performance record, including the ability to 

fulfill the requirements of the agreement under various risk 

assessment scenarios. Additionally, the Annual Plan of 

Operations that AIPs have always been required to submit 

must now contain a Contingency Plan describing how 

the AIP will service policies if a managing general agent 

or service provider is unable to meet the requirements of 

their agreement with the AIP, the AIP is unable to meet the 

requirements of the SRA, or if they are otherwise not eligible 

to participate in the Federal crop insurance program. 

The financial monitoring of AIPs is comprised of yearly 

and quarterly financial analyses and on-site, detailed, 

financial reviews conducted on each AIP once every 3 years. 

On-site review procedures were originally implemented in 

May 2003, and were updated in February 2004. These 

procedures will continue to be updated, as needed, to refine 

the process. 

In the past, on-site reviews focused more on internal 

controls. However, since the expansion of the operation 

reviews and the update of RMA’s financial analysis process, 

the scope has been broadened significantly to analyze the 

overall financial health of those AIPs being reviewed. 

Some of the significant changes in the SRA and how 

they will affect the partners in the agreement are described 

below. 

Oversight

Oversight

1 risk management agenc
REINSURANCE

Assigned Risk Fund – Changes were made, in the SRA, to 

the terms of the Assigned Risk Fund. This fund is a pool 

of policies that has the least amount of AIP gain or loss 

exposure. There are state-by-state limits on the amount of 

premium an AIP can place into the assigned risk fund based 

on a percent of the total premium written in the State. 

Changes in the 2005 SRA include the exclusion of pilot 

program premium, increasing State limits, increasing the 

number of States with a 75 percent limit, and a reduction 

of AIP retention. 

These changes increased the Assigned Risk Fund capacity 

for the AIPs and decreased the retention of reinsurance 

in States with poorer loss experience. In addition, the 

AIPs have more incentive to write pilot program business 

knowing it will not adversely impact their Assigned Risk 

Fund capacity. AIP underwriting-gain potential is increased 

with the ability to place more of the higher risk business 

with RMA. These changes are expected to increase AIP 

profits an estimated $3.8 million.

Net Book Quota Share–The Net Book Quota Share 

(NBQS) provision was introduced in the 2005 SRA. The 

NBQS provides RMA with a 5 percent share of an AIP’s 

annual underwriting gain or loss, and associated premium 

and losses. As a result of this change, RMA saves an 

estimated $16 million annually in underwriting gains that 

would have been paid to the AIPs. 

Reinsurance Account–Prior to the 2005 SRA, RMA 

withheld 60 percent of AIP underwriting gains that 

exceeded 17.5 percent of retained premium. However, the 

funds withheld created a reserve account in the event the 

AIP experienced excessive losses in subsequent years. The 

withheld underwriting gains were paid to the AIP within 

the next 2 years. The 2005 SRA eliminated the Reinsurance 

Account, allowing the AIPs who experience underwriting 

gains in excess of 17.5 percent of retained premium to 

receive their total annual underwriting gain and have the 

opportunity to generate additional investment income.

EXPENSE SUBSIDIES AND FEES 

Expense Subsidy Reductions–The Administrative and 

Operating Expense (A&O) and Catastrophic Risk 

Protection (CAT) Loss Adjustment Expense subsidies paid 

to the AIPs were reduced for the 2005 and subsequent 

reinsurance years, resulting in an estimated RMA savings of 

$11 million for 2005 and $25 million for 2006.

Late-Filed Acreage Fee–In 2004, an AIP’s A&O subsidy 

on a policy was reduced if acreage report data was submitted 

late. This provision was eliminated in 2005, saving the AIPs 

an estimated $400,000 per year.

Late-Filed Sales–An AIP will receive a smaller subsidy 

than previously for late-filed sales, costing AIPs an estimated 

$600,000 per year. 

INSURANCE OPERATIONS

Large Claims–The 2005 SRA allows RMA to more actively 

participate in the loss adjustment process on claims in 

excess of $500,000, decreasing the possibility of large loss 

overpayments and AIP legal costs. 

Compliance and Corrective Action–AIPs are paid an 

A&O subsidy to deliver and service the crop insurance 

program per RMA regulations and procedures. A violation 

in claims processing (such as loss adjustment, quality 

control reviews, verification of applicable information, etc.) 

will now result in an A&O subsidy reduction of 5 percent 

(versus 10 percent previously) of the net book premium 

on all crop insurance contracts affected by violation. A 

violation in the sales and servicing of the crop insurance 

contract, excluding the claims process, will now result in 

an A&O subsidy reduction of 15 percent (versus 5 percent 

previously) of the net book premium on all crop insurance 

contracts affected by the violation. 

Stricter AIP Requirements –The 2005 SRA provides for 

stricter requirements that the AIP have sufficient financial 

and operating resources and a history of successful insurance 

business prior to being approved for an SRA. Stricter AIP 

requirements are a control measure to reduce the risk of 

future company failures such as that which occurred with 

the failed AIP, American Growers Insurance Company. 

RMA’s cost in the dissolution of American Growers was 

approximately $40 million. 

Quality Control and Data Mining–The use of data 

mining in the quality control process has reduced the 

number of random reviews conducted by AIPs and has 

created targeted reviews based on data anomalies. For more 

information on data mining, see page 7.

 Program Compliance and Integri     Annual Report to Congress January-Decemb0

Oversight
Operaion

RMA will institute a 3-year, cyclical, program-error-rate 

protocol in conjunction with AIP Operations Reviews. 

This effort makes the best use of limited resources. Using 

this protocol, RMA reviews one-third of AIPs each year. 

RMA will review the AIPs’ books of business by randomly 

selecting 750 policies (50 from each AIP) every 3 years. 

RMA’s data mining contractor, the Center for Agricultural 

Excellence (CAE) at Tarleton State University, located in 

Stephenville, Texas, will select the policy samples. CAE 

has stored all of RMA’s crop insurance data from 1996 

forward. This protocol provides a larger sample, which 

in turn provides a more accurate error-rate estimate than 

any past, random, statistical-sample review of the AIPs’ 

operations by RMA or any of the Agency’s oversight groups 

in a 3-year period.

Oversight

Once an entire 3-year cycle of reviews has been 

completed, RMA will begin replacing previous error-rate 

data with the new data as each AIP’s subsequent review is 

completed. This protocol will provide RMA a rolling error 

rate with one-third of the error-rate findings being replaced 

annually. RMA expects to complete the first 3-year cycle 

with the reviews conducted in 2007.

Each Operations Review is conducted in two phases 

– an assessment of the AIPs’ established operational systems 

designed to administer the crop insurance program, and an 

evaluation of the AIPs’ delivery of the program through a 

review of selected policies. 

RMA conducted an initial pilot operations review in 

2004. 

3 risk management agenc
RMA continues to be at the forefront in using state-of-theart technology to maximize effective and efficient use of 

precious resources to accomplish its compliance mission. 

We continually strive to improve the methods we employ 

to adapt these technologies to our unique mission. 

Scring 

As first reported in the 2003 Annual Report, RMA uses a 

system to measure and score each compliance case based on 

predetermined criteria. The Regional Compliance Office 

(RCO) assigns a priority level to each case, allowing that 

office to adjust the balance of investigative efforts to focus 

staff time more heavily on the cases that display the most 

significant indicators of potential fraud. 

To create this scoring system, RMA worked with CAE, 

a partnership between Tarleton State University and 

Planning Systems Incorporated. CAE is a data research and 

technology development center that also assists RMA with 

ongoing data warehousing and data mining projects (p. 7). 

Using the vast store of information on insurance policy 

histories, past weather conditions, and other data stored in 

a data warehouse, CAE helped RMA design a system that 

can look at the insurance history of any individual producer 

and compare it against the histories of other producers 

who have insured the same crop in the same geographical 

area. It then takes the resulting information and gives the 

producer a score relative to the percentage of atypical policy 

behavior that the producer displays in comparison with his 

or her peers.

Specifically, for any producer or policy under review, 

three independent measures are evaluated:

1. Frequency of loss – The rate at which the producer has 

filed claims;

2. Severity of loss – The percentage of loss claimed;

3. Size of loss – The amount of indemnity paid.

Each of these measures is averaged from the producer’s 

insurance history over the previous 5 years. However, the 

averages are weighted so that more current policy activity 

has a higher value than older activity. Once each of 

these measures is averaged, they are put together to form 

a composite score. Where applicable, this score is also 

automatically adjusted to compensate for years with overall 

low or high loss levels. 

At the same time, the system creates an average score for 

all producers growing the same crop in the same county 

or local geographic region as the producer being scored. 

This allows a comparison of the producer to his or her peers 

growing the same crop in the same area, and a determination 

if the producer’s insurance history reflects a discrepancy from 

the norm in that area. The producer is then assigned a score 

of 1 to 50, based on the level of discrepancy discovered. 

The higher the score, the higher the indication that this 

producer’s case should be investigated.

Since the initial release of the producer score in July 

2003, CAE has improved the producer scoring algorithm. 

Replant indemnities were excluded. Group insurance 

plan policies are not considered in the scoring algorithm 

because losses are based on countywide yields and not on 

an individual producer’s yields. In addition, any indemnity 

less than $100 now receives a zero score.

Scores are issued on a county, crop-policy basis. The 

chart below shows the number of producers scored over the 

5-year period from 2000 to 2004.

Technology

 Program Compliance and Integri     Annual Report to Congress January-Decemb0

Technology

Table 1: Reinsurance Year 2004 

Producer Distribution by Score

Score Producers Producer Percent

0 1,193,824 64.3

1-9 344,078 18.5

10-19 195,152 10.5

20-29 86,199 4.6

30-39 32,417 1.7

40-49 4,077 0.02

Total 1,855,747
New Case Mana

In 2003, RMA implemented a new way to manage its 

compliance workload. 

Magnum is information technology that brings review 

processes, compliance personnel, and their electronic 

case materials together in one central database. This case 

management software was developed by contractors and 

tailored to fit RMA business processes. As a result, Magnum 

allows users to record sources of reviews, document 

allegations and review objectives, track review progress, 

report results, and follow legal proceedings. 

Magnum can accommodate changes in requirements; a 

necessary feature for today’s environment. RMA’s previous 

tracking systems were centrally located. Magnum offers 

its users access from remote locations. Magnum also 

allows users to attach electronic documents so users across 

the Nation can access relevant case files. Using this new 

technology, RMA compliance personnel can create ad 

hoc reports and standard report templates, and can easily 

consolidate regional data for reports such as the Annual 

Report to Congress.

2004 ACTIVITIES

The volume of cases processed in Magnum continues to 

increase each year. In January 2004, Magnum became fully 

operational. Also in 2004, RMA focused on improving 

Magnum by introducing more standards, continuing past 

successes, and using Magnum to report our compliance 

accomplishments. The data contained in this Annual 

Report to Congress and summarized in the Results section 

were produced from reports created using Magnum. 

In 2004, a rules committee was instituted to introduce 

more controls into the development and operation of 

Magnum. The committee developed a procedures manual 

and continues to function as a change control board to 

safeguard Magnum’s standards.

Throughout 2004, compliance personnel were provided 

followup training and applied project-management 

principles to continue past success. RMA used online 

training to administer individual and group training for 

Magnum and its ad hoc query tool, Snap Reporter.

DataM

The data warehousing and data mining projects were 

highlighted in previous annual reports. RMA, working in 

partnership with CAE, incorporated the latest advances in 

database technology to create a centralized “data warehouse” 

of all crop-insurance-related data collected in RMA databases. 

RMA investigators and other staff use this centralized data 

warehouse to search (or “mine”) existing data records to 

compare policies and/or detect individual producers whose 

policies demonstrate atypical patterns, which in some cases 

may indicate potential fraudulent activity. Data mining is 

also used to analyze and uncover larger national patterns 

that may indicate schemes for fraud, waste, and abuse. The 

results of such data mining techniques allow RMA to focus 

efforts on the most problematic areas in the crop insurance 

program quickly so they can be investigated and corrected. 

Prior to the development of these tools, it was difficult, and 

sometimes impossible, for RMA to conduct this sort of 

historical research and data analysis, since the various types 

of data records were stored in different databases that used 

conflicting data models.

CAE continues to maintain the data warehouse and 

conduct data mining analysis for RMA. The data warehouse 

now contains more than a billion records, including:

 All RMA Reinsurance Year policyholder

data from 1991 to present;

 30 years of weather data;

 Annual National Agricultural Statistics 

Service data from 1950 to present; 

 RMA actuarial data; and

 RMA Reinsurance Accounting System data.

The data warehouse is updated monthly and data mining 

activities are currently taking place from the warehouse. 

The findings from such mining activities are saving RMA 

and American taxpayers millions of dollars by preventing 

cases of fraud, waste, and abuse before they occur. In 

fact, in 2004 alone, the CAE spot check list derived from 

data mining saved the insurance program $71 million in 

cost avoidance. Further, the spot-check-list data mining 

Technology

5 risk management agenc
has accounted for a large percentage of RMA’s total cost 

avoidance figures for the past 4 years. The RCOs conducted 

independent data-mining- based reviews that account for 

an additional $7 million in cost avoidance in 2004. RMA 

expects such savings to continue and perhaps increase as the 

Agency moves forward with the program.

DATA MINING AND THE SPOT CHECK LI

One data mining method that has proved to be a particularly 

effective and proactive deterrent to fraudulent activity 

is the RMA spot check list. Each year, RMA develops a 

list of agricultural producers whose operations warrant an 

on-site inspection during the growing season. After the 

RCOs review the list, it is passed on to FSA staff to conduct 

growing-season inspections of the producers on the list. 

CAE produced the 2004 spot check list by mining data 

collected during 2003. The evaluation produced a list of 

2,145 producers whose patterns appeared to be atypical 

compared to others in their region. RMA’s RCOs then 

reviewed the list of names and dropped 22 producers 

from the list. The RCOs then added an additional 372 

producers based on their field observations. This additional 

list is referred to as the RCO Spot Check List in this report. 

The combined list was shared with local FSA offices and 

AIPs who provided service to the producers on the list, and 

growing-season inspections were conducted. FSA also sent 

letters to all producers identified in the spot-check process, 

informing them that they were on the list and identified for 

a growing-season inspection.

Statistics show a substantial reduction in indemnities 

paid to producers on the 2004 spot check list, as a result 

of this process. For instance, in 2003, all producers who 

would eventually be named on the 2004 spot check list 

claimed $222 million in indemnity payments. In 2004, 

after they had been informed they were on the spot check 

list, the indemnities claimed by these producers decreased 

to $151 million (figure 1).

 Program Compliance and Integri     Annual Report to Congress January-Decemb0

Technology

Premium Source: USDA/Risk Management Agency

$250,000,000

$225,000,000

$200,000,000

$175,000,000

$150,000,000

$125,000,000

$100,000,000

$0

Indemnity 2003 2004

Spot Check List (Producers Followed FIGURE 1. Over Time) for 2004

$222,675,641

$107,353,200

$151,322,112

$114,857,430
This pattern has been consistent throughout the 4 years 

the spot check list has been in use (figure 2). As a result 

of the 2001, spot check list, indemnity claims for farmers 

on the list dropped from $145 million to $97 million. In 

2002, spot-check-list producers’ total indemnities dropped 

from $234 million to just over $122 million; in 2003, 

indemnities dropped from $187 million to 106 million; 

and, as stated above, indemnities dropped from $222 

million to $151 million in 2004. The 4-year results ($312 

million in reduced indemnities) show that producers who 

knew they were on the list chose to file fewer claims for less 

indemnity. 

Further, when these yearly indemnity reductions 

are compared with the amount of insurance premium 

producers are buying each year, it becomes clear that the 

amount of insurance this group of producers is purchasing 

has remained constant. However, producers’ claimed 

indemnities have decreased to levels much closer to their 

premiums, indicating that the spot check list is helping to 

create a more sound premium/indemnity balance.

Clearly, the spot check results shown in figures 1 and 

2 demonstrate how financially beneficial the data mining 

and warehousing program is to RMA in the prevention of 

erroneous indemnity payments. Further, the program has 

Technology

7 risk management agenc

Source: USDA/Risk Management Agency Idemnity

SCL Year

Premium

SCL Year

Idemnity

Next Year

Premium

Next Year

Crop Year 2001-2004 Spotcheck List Figure 2. Premium & Indemnity

2001 2002 2003 2004

$240,000,000 

$220,000,000 

$200,000,000 

$180,000,000 

$160,000,000 

$140,000,000 

$120,000,000 

$100,000,000 

$80,000,000 

$60,000,000 

$40,000,000 

$20,000,000 

$0 
proven to be cost-effective. The data-mining project budget 

was planned for an initial 5-year period with a total cost 

of approximately $18 million. However, as mentioned 

earlier, in only the first 4 years of the project, the spot check 

list alone has saved the crop insurance program more than 

$312 million in cost avoidance through lower claims and 

indemnity payments. This means that for every dollar 

RMA spends on data mining, the Agency saves more than 

$18 in program costs. Projected to the end of the contract, 

the ratio will approach $20 saved for each $1 expended. 

In addition to the spot check list, CAE has implemented 

and continues to develop several dozen data mining products 

that are expected to generate savings, including:

 Development of a “scoring system” so RCOs 

can prioritize entities for investigation;

 Identification of individual loss adjusters who work 

all or almost all of a particular agent’s claims, 

and comparison of these loss adjusters’ claims 

and actions against those of their peers; 

 Identification of AIPs with overpaid claims and an overall 

account of the overpaid indemnities paid each year;

 Discovery of “lost producers” – those who were 

previously on the spot check list but have started 

insuring under some other Social Security 

number or tax identification number; 

 Development of a simple, user-friendly interface 

that allows executive-level users to access and 

identify necessary information easily; and

 Development of actuarial tools to help 

evaluate final planting dates.

The results obtained during the first 4 years of this project 

have encouraged RMA to develop more investigative data 

mining scenarios. The following are some of the projects 

CAE is currently working on, which RMA plans to deploy 

in the near future:

 Developing actuarial tools to help evaluate 

map rates and map areas;

 Providing Geographic Information System (GIS) 

and weather information as an investigative 

tool for analyzing indemnity claims;

 Integrating GIS and weather information into 

data mining scenarios to better reflect actual 

growing conditions encountered by producers;

 Developing simulation technology to 

help evaluate pilot programs;

 Developing an interface to provide RMA personnel 

the ability to query the data warehouse and 

create custom reports for analysis.

These ongoing projects are only a few examples of the 

research and development RMA has planned for 2005 

and beyond. Working with CAE, the Compliance Office 

will continue to develop more products that help expose 

patterns of fraud, waste, and abuse. RMA is confident 

that the cost savings experienced using the data warehouse 

and data mining program will continue because of these 

upcoming projects. 

DISPARATE PERFORMANCE – AGENTS AND LOSS ADJUSTERS

Fraud, waste, and abuse of the crop insurance program 

are important problems recognized by AIPs and RMA. 

ARPA mandates that USDA develop and provide tools, 

information, and analysis of “loss claims of insurance agents 

and loss adjusters to identify those agents and loss adjusters 

who have loss claims that are in excess of 150 percent (or an 

appropriate percentage specified by RMA) of the mean for 

all loss claims associated with other agents and loss adjusters 

operating and adjusting in the same area.”

Using data-mining technology, RMA analyzes statistical 

information on insurance agents whose policies have paid 

out loss claims that were 150 percent or more above the 

mean for other agents in their local area—a disparity that 

can indicate fraudulent activity. Similarly, the data-mining 

process identifies insurance loss adjusters who consistently 

reported significantly lower production yields (both 

harvested and unharvested) than their peers, which resulted 

in indemnity payments that were 150 percent or greater 

than the average for that area—another condition that may 

indicate suspicious activity. 

Beginning in 2001, CAE produced an annual report of 

agents and loss adjusters whose records reflected disparate 

behavior. This list identified the top 5 percent of agents 

who had the greatest disparities in loss claims relative to 

their local agricultural production area. It also identified 

 Program Compliance and Integri     Annual Report to Congress January-Decemb0

Technology
the most egregious cases of loss adjusters who consistently 

reported lower production yield figures than their peers.

The 2004 list of agents and loss adjusters report offered 

refinements for developing the ARPA-required, 150-

percent-list of agents and loss adjusters. Two scenarios 

were used to flag anomalous agents; another two scenarios 

were developed to identify anomalous loss adjusters. 

Clusters of severe losses associated with an agent or loss 

adjuster are considered anomalous when the background 

loss experience is dissimilar. Catastrophic weather events 

like hail and excess wind are excluded because they 

naturally produce clusters of severe losses. To help ensure 

the integrity of comparisons, the 2004 scenarios control 

for producer’s share, insurance plan, coverage level, price, 

cause of loss, crop, crop type, and practice.

Policies with indemnities over $10,000 are identified 

for each agent and loss adjuster for the 2004 ARPArequired list.

AGENT METHODOLO

The following two scenarios were used to flag agents:

Agents Gain and Loss–This scenario flags agents associated 

with producers whose losses dramatically increase after 

switching agents. The increased losses occur in multiple 

counties and for multiple crops and the producers have higher 

losses than other producers in the same area for the same crop. 

In addition, before the agent switch, the producer had a loss 

experience similar to others in the area. Transfers of producers 

within the same agency and producers switching agents because 

an agent stopped selling policies were excluded.

Agent Anomalous Losses–This scenario flags agents 

who have producers reporting disproportionate losses as 

compared to other producers in the county for the same crop, 

crop type, and practice. Revenue plans were converted to 

use the Multi-Peril Crop Insurance (MPCI) price. Liability, 

premium, and indemnity were converted to the 50 percent 

coverage level. Producer’s share was accounted for. Three 

measures were used to compare agents’ books of business.

 Size – Both the amount of an agent’s indemnity 

and the agent’s indemnity as a percent of 

total county indemnity were used. 

 Frequency – Both the number of claims and the 

proportion of claims to no claims versus the 

remaining county claims to no claims were used. 

 Severity of Loss – Both the agent’s loss cost ratio 

and the difference between an agent’s percent of 

the total county liability versus an agent’s percent 

of the total county indemnity were used.

Counties and agents that experienced near total losses 

were excluded from this algorithm, as well as counties and 

agents that experienced significant losses due to hail or 

excess wind.

LOSS ADJUSTER METHODOLO

Loss adjusters are compared at county, crop, type, and 

practice level, and claims are counted by crop unit. 

Catastrophic causes of loss and group insurance plans 

were excluded. Revenue plans were converted to use the 

MPCI price. The coverage levels were converted to the 

50 percent coverage level. In addition, producer’s share 

was accounted for. Only harvested claims were used in 

the comparison. Unharvested and prevented-planting 

claims do not differ much by loss cost, and are largely total 

losses. If a harvested claim was mixed with a preventedplanting claim in the same crop unit, then these claims 

were also excluded. Over 70 percent of all crop units 

with claims have only harvested claims. Counties that 

experienced disastrous losses were excluded.

Two scenarios were used to flag loss adjusters:

Loss Adjuster Severe Adjustments – Loss adjusters are 

flagged when they handle too many large, severe-loss claims 

as a percent of their total book of business. An adjuster’s 

losses were compared by cause of loss for crop, type, and 

practice in a county. The loss adjuster’s loss cost is compared 

to that of all other loss adjusters in the same area. 

Technology

9 risk management agenc
Loss Adjuster / Producer Linkage – Loss adjusters 

sometimes make judgments favoring particular producers 

repeatedly over the years and in different counties. The 

flagged loss adjuster must have worked in at least two 

counties with producers who had large, severe-loss claims 

for at least 2 years. Severity is measured by loss cost. A 

producer has to exceed 90 percent of the other producers 

in severity in the same county for crop, type, practice, and 

cause of loss.

RESULTS

The 2004 list of agents and loss adjusters identifies 71 

agents and 58 loss adjusters. A total of 932 polices, where 

indemnity is greater than $10,000, were flagged by the four 

scenarios. Agent Anomalous Losses make up nearly 70 

percent of these policies, while only 2 percent (19 policies) 

can be attributed to the Loss Adjuster Severe Adjustments 

Scenario.

Policies associated with an agent accounted for $9,130,472 

in risk premium and $31,347,737 in indemnity. 

Loss adjusters and the associated flagged policies account 

for $1,140,775 in risk premium and $4,648,496 in 

indemnity. 

NON-SPOT-CHECK COMPLIANCE OFFICE DATA MININ

RMA RCOs use data mining to conduct specific types of 

reviews where the technology can reveal possible errors 

within a program. For example, in 2004, one RCO 

discovered, through data mining, that tobacco was being 

over-insured by four different AIPs. The North Carolina 

Actuarial Special Provisions state that tobacco can be insured 

at the higher 80 or 85 percent level only for Enterprise or 

Basic units. Data mining identified policies that did not 

adhere to this rule. The AIPs were contacted and premium 

overstatements of $38,249 and indemnity overpayments of 

$11,840 were corrected. RCO data-mining-based reviews 

accounted for $7 million in cost avoidance in 2004.

Remoe

In 2004, RMA used remote sensing data and related 

technologies to support its program compliance efforts and 

to aid RMA personnel and outside customers working on 

Agency mission-critical projects.

RMA uses remote sensing to support combating 

waste, fraud, and abuse in it programs. In 2004, RMA’s 

Compliance Office, in conjunction with USDA’s OIG 

and the Department of Justice (DOJ), used Landsat 5 and 

Landsat 7 data to support an investigation of conspiracy 

and insurance fraud for submitting false claims and false 

statements to USDA. This investigation resulted in the 

conviction and sentencing of the producer to 3 years and 5 

months in a Federal prison and $448,000 in restitution. A 

co-conspirator was also convicted.

Based upon the success of using remote sensing in 

investigating and combating waste, fraud, and abuse, 

RMA provided remote sensing training to a number of 

its compliance investigators in March 2004. Investigators 

were trained to acquire Landsat 5 and 7 imagery from the 

USDA Image Archive, managed by FSA, and then to make 

preliminary determinations from the imagery to approve a 

crop insurance claim or forward it on to a remote sensing 

expert for further investigation. Such training has increased 

the volume of image requests RMA has made from the 

USDA Image Archive.

In fiscal year 2004, 535 satellite images with a total 

value of $321,000 (if purchased directly from the United 

States Geologic Survey) were acquired from the USDA 

Image Archive; of the 535 images, 197 images were used 

for FY 2004 investigations that were settled, prosecuted, or 

currently with DOJ (imagery value: $118,000). 108 images 

are currently being used in ongoing RMA compliance 

investigations that are not yet settled, referred to OIG, or to 

DOJ (imagery value: $64,800). The USDA Image Archive 

yearly subscription fee is $75,000.

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Technology
11 risk management agenc

The mission to detect, eliminate, and proactively prevent 

fraud, waste, and abuse could not be accomplished 

without a large collaborative effort between many 

parties. To meet our goals and uphold the integrity of 

the crop insurance program, RMA relies not only on the 

hard, cooperative work of our own employees, but also 

on our strong, anti-fraud alliance partnerships with FSA 

and AIPs. We collaborate with many other partners as 

well, including OIG. RMA is dedicated to developing 

and refining our collaborative efforts with these partner 

agencies because we understand that only through 

strong partnerships can we protect America’s agricultural 

producers from those who would take advantage of the 

crop insurance program. Each year we collaborate more 

successfully with our partners, and we continued to build 

on these successes in 2004. This section of the report 

will demonstrate how these collaborative efforts have 

resulted in bringing some high-profile cases of fraud 

and potential fraud to justice. It will also discuss RMA’s 

many ongoing collaborative partnerships and show some 

specific examples of how these collaborations work.

High-Pr

Specia

The Special Investigations Branch (SIB) is a specialized unit 

within RMA’s Compliance Office. The SIB investigates 

significant, high-profile cases of alleged fraud, waste, and 

abuse for RMA, and collaborates on investigations with 

OIG, RMA RCOs, and FSA.

Once a suspected case of fraud is substantiated, SIB 

investigators refer the case to OIG, which is responsible 

for investigating the case further and referring suggested 

cases for prosecution to the U.S. Attorney’s office. SIB 

investigators provide direct assistance to OIG during 

their criminal investigations, including executing search 

warrants, conducting interviews, and providing courtroom 

testimony.

On occasion, SIB also makes referrals to State or local 

prosecutors regarding insurance fraud. They can also refer 

cases for Federal, civil action to the U.S. Attorney’s office 

through OIG or USDA’s Office of the General Counsel 

(OGC). Additionally, SIB may refer cases to the RMA 

Administrator for disqualification of producers, insurance 

agents, loss adjusters, AIPs, and others who violate 

program rules.

Collaboration in Action: SIB Investigation Uncovers 

$1,186,432 in Indemnity Overpayments in Polk and Marshall 

Counties, MN and Cass County, ND

During the course of this case, the insureds submitted 176 

claims to USDA, totaling $4,208,450 in farm payments. 

Two entities also received approximately $1,186,432 in crop 

insurance indemnity payments and $374,890 in premium 

subsidies to which they were not entitled. Investigators 

determined that from 1996 to 2003, the insureds attempted 

to circumvent farm-program-payment caps by claiming to 

USDA that three entities were separate and distinct farming 

operations. The insureds claimed that certain persons 

affiliated with the three partnerships were actively engaged 

in farming and that each partnership received a share of 

the insured crops. Investigators determined this was false 

information and by providing such false information to 

USDA, the insureds were able to increase their annual 

payments under five separate Federal farm programs. 

Sanctions against the insureds are being pursued.

Collaboration in Action: SIB Investigation Uncovers $912,364 

in Indemnity Overpayments in Carroll County, IA

An ongoing investigation into Federal farm program fraud and 

Federal crop insurance fraud in Iowa resulted in Mark Hoffman, 

his wife Sue Hoffman, and their son Justin Hoffman being 

charged with multiple counts of making false statements to a 

bank in order to get a farm loan, making false statements to FSA 

and RMA in order to obtain Federal farm program benefits and 

crop insurance proceeds, and concealing assets from and making 

false statements to the United States Bankruptcy Trustee. The 

indictment alleged that in 1997 the Hoffmans made materially 

false statements as to their true financial status to Mercantile 

Bank, now US Bank, in order to obtain a $1.6 million loan. 

According to the indictment, the Hoffmans continued to 

Collaboration

Collaboration
submit materially false statements as to their financial condition 

in order to preclude US Bank from foreclosing on its loan 

while they sold and depleted crops, machinery, and equipment 

secured by US Bank and then transferred proceeds of US Bank’s 

security to their son. The indictment further alleged that from 

sometime in early 1998 until the present the Hoffmans engaged 

in a scheme to obtain Federal farm program benefits and crop 

insurance proceeds and elude creditors by directing their son 

and other individuals to make false certifications on documents 

to FSA and RMA in order to obtain Federal farm program 

benefits and crop insurance proceeds they were not otherwise 

entitled to receive or would have been seized by creditors. 

Charges also included that, between 1998 and 2003, all three 

Hoffmans made or caused to be made false statements which 

resulted in FSA paying the Hoffmans and other individuals on 

behalf of the Hoffmans $746,700 in program benefits and in 

RMA paying the Hoffmans and other individuals on behalf 

of the Hoffmans $912,364 in crop insurance proceeds. A 

sentencing hearing is scheduled. 

Collaboration in Action: SIB Investigation Leads to $340,517 

in Restitution to USDA in Clay County, MN

RMA’s Northern RCO, working with SIB, investigated an 

FSA tip indicating that Wear Farms, comprised of a father 

and his two sons, hid 1998 production in order to inflate 

crop insurance indemnities, which also caused additional 

improper payments from FSA disaster assistance programs. 

The Government charged that Wear Farms conspired to 

defraud RMA by submitting false and erroneous information 

on its federally reinsured crop insurance claims for the 1998 

crop year. Steven Wear repaid $128,826 of the alleged 

unreported production during the investigation. However, 

he denied allegations of additional unreported production 

in that year and in several other years. Prior to the criminal 

trial, the Wears agreed to resolve this matter expeditiously 

and without further costs by entering into a Stipulation 

for Compromised Settlement in June of 2004. Steven 

Wear agreed to pay additional restitution in the amount 

of $150,000 and accept a lifetime exclusion from all RMA 

and FSA programs. Wear’s two sons and partners in Wear 

Farms signed a Stipulation for Compromised Settlement to 

resolve Government allegations that they submitted false 

and erroneous program eligibility information to RMA 

and FSA. Both sons agreed to joint and several liability 

of $61,691 to USDA’s Commodity Credit Corporation. 

The agreement negotiated by the US Attorney’s Office of 

Minnesota also excluded them from participating in most 

RMA and FSA programs for 5 years. 

Collaboration in Action: SIB Investigation Uncovers $9.2 

million in Indemnity Overpayments in Chandler, NC

This investigation was conducted jointly with SIB, the Internal 

Revenue Service, and USDA’s OIG. The Warrens provided 

false production information to inflate their Average Production 

History (APH). They shifted production between insured units 

and underreported overall total production between 1997 and 

2001. They inflated acreage to increase indemnity payments 

and falsified planting dates to be eligible for crop insurance. 

The Warrens staged a fake hailstorm in 2001 to collect a replant 

payment. The investigation found that Warren Farms collected 

more than $9.2 million in Federal crop insurance payments for 

alleged losses between 1997 and 2001. Warren Farms attempted 

to collect an additional $3.8 million in crop insurance payments 

for alleged losses during the 2001 crop year. Robert and Viki 

Warren were indicted and both pled guilty to charges resulting 

from this investigation. Three employees of Warren Farms 

provided false testimony during this investigation. Robert 

Chambers and Demetrio Jamies were indicted and pled guilty 

to perjury charges. Harold Dean Cole was also indicted and 

subsequently convicted at a jury trial of charges stemming from 

his false testimony. Thomas Jeffrey Marsh, crop insurance loss 

adjuster and George T. Kiser, an independent crop insurance 

agent, were indicted and pled guilty to charges that they assisted 

the Warrens in defrauding the Federal crop insurance program. 

Major Frank Calcutt, crop insurance loss adjuster, pled guilty 

to criminal information, and was charged with assisting the 

Warrens in defrauding the Federal crop insurance program.

Collaboration in Action: Concerned Citizen Reports Elaborate 

Illegal Scheme in Iowa

A concerned citizen alerted RMA to a possible fraudulent 

scheme that began in crop year 2000, to defraud USDA, and 

in particular RMA, of farm program benefits in the northern 

district of Iowa, which also spread to two counties in South 

Dakota. SIB personnel, OIG, FSA county personnel, and 

 Program Compliance and Integri     Annual Report to Congress January-Decemb04

Collaboration
13 risk management agenc

OGC investigated the case for several years and were rewarded 

for their efforts by seeing the producer, Don Kluver, plead guilty 

in 2004, to defrauding USDA of nearly $250,000. This case is 

related to the Hoffman case in Carroll County, Iowa.

In 2000, Kluver was farming several thousand acres in 

Crawford and Sac Counties in Iowa, in addition to farming 

4,500 acres of soybeans in Tripp and Mellette Counties 

in South Dakota. Kluver admitted that in order to avoid 

program payment limitations he did not disclose the South 

Dakota farming operation to USDA so he could qualify 

for certain benefits. He also admitted that he caused an 

employee and the employee’s brother to certify that they 

were farming the South Dakota operation so that he could 

obtain additional benefits. 

Kluver also admitted that he aided another farmer and his 

wife (the Hoffmans) in evading their bankruptcy creditors. At 

their request, he purchased farm machinery and equipment 

valued at more than $141,000 and concealed this from the 

couple’s creditors. Kluver faces sentencing. In regard to the 

charge based on false statements to RMA, Kluver faces up to 30 

years imprisonment without the possibility of parole, a fine of 

up to $1 million, a mandatory special assessment, and a term of 

supervised release of up to 5 years. 

Collaboration in Action: Wendell Mints Could Face up to 125 

Years in Federal Prison

A Texas farmer, Wendell Mints, was convicted in 2004 on 

all fraud charges in Wichita Falls, Texas, after being indicted 

on 25 counts of conspiracy, false claims, and false statements. 

According to the evidence presented at trial, Mints operated 

an elaborate scheme in which he conspired to falsify crop 

insurance loss documents and collected insurance money 

for thousands of acres of cotton, wheat, and sorghum fields 

that he did not plant, costing the U.S. Government more 

than $500,000. 

The case became known because of astute FSA county 

employees who detected inconsistent statements Mints made 

in documents submitted to their office. They physically 

inspected the fields and found no evidence that Mints 

had planted his crops as he had claimed. This initiated a 

criminal investigation where RMA’s SIB personnel played 

a central role.

An expert in satellite imagery testified that infrared satellite 

photographs taken of Wilbarger County indicated that the 

condition of the fields and crops growing on them were 

inconsistent with Mints’ claims. When Mints was asked to 

provide receipts showing he had purchased seed to plant the 

crops, it was proven he went to a seed dealer and had that 

seed dealer prepare false receipts to reflect bogus sales. 

Coll

The high-profile case examples above represent just a few of 

the many ways in which RMA collaborates regularly with our 

anti-fraud alliance partners and fellow agencies to maintain 

the integrity of the Federal crop insurance program. The 

following sections will detail the many collaborations that 

RMA contributes to, and will give some “Collaboration in 

Action” case examples that show how these collaborations 

work, and how they are producing successful results.

Working

FSA is one of our strongest allies in the fight against fraud, 

waste, and abuse. FSA personnel serve as our eyes and ears 

in the field, and provide us with invaluable, on-the-ground 

analysis and feedback about the farming operations in their 

areas. We, in turn, work to provide them with the help and 

information they need to monitor agricultural producers as 

effectively as possible. We do so through:

 Spot check referrals; 

 4-RM referrals; and

 Consultation with FSA State committees.

Each of these areas will be discussed below.

Spot Ch

As explained in the section of this report on data mining (p. 7), 

each year RMA uses data-mining technology as well as analysis 

and past loss experience to develop a list of producers with 

notable policy irregularities such as unusually high loss ratios, 

high frequency of losses, and severe losses. Every April RMA 

provides this list to the appropriate FSA County Offices, whose 

staffs help us review these cases for potential fraud, waste, and 

Collaboration
abuse by performing inspections (spot checks) of the farming 

operations on the list. The FSA County Offices then refer their 

findings back to RMA, and we then provide these results to the 

appropriate AIPs for those operations. At the same time, RMA 

sends notification by letter to all producers on the list.

Collaboration in Action: Spot Check Uncovers Fraudulent 

Prevented Planting Claim in Benson County, ND 

RMA’s data-mining initiative flagged this producer on the 

spot check list, resulting in FSA personnel performing field 

inspections on the property in August 2004. FSA personnel 

then provided us with documentation and photographs of 

the acreage. We evaluated the documentation and provided 

the AIP with the referral and analysis. We requested that the 

AIP conduct a claim review. The producer had a history of 

submitting prevented planting claims. They found that the 

reported prevented planting acres consisted of trees, brush, 

rock piles, and grass. The AIP determined that the land was 

dry and suitable to be brought back into production. The 

AIP also determined that the producer had not attempted, 

either in the fall of 2003 or in spring of 2004, to prepare 

the land for planting. In crop year 2004, the producer 

did not plant any acreage and therefore was not entitled 

to a prevented planting indemnity. The company denied 

prevented planting on 303.7 acres in crop year 2004, 

resulting in a cost avoidance of $19,322. 

4-RM R

Another collaborative effort between RMA and FSA is 

our 4-RM referral process. However, in this case, instead 

of RMA providing information to FSA, as with the spotcheck referrals process above, 4-RM referrals originate 

from the observations of FSA County Office personnel in 

the field, and are then sent to the RMA Compliance field 

offices for followup. To help conduct this referral process as 

easily and smoothly as possible, RMA and FSA developed a 

procedural guide for staff to follow, the 4-RM Handbook, 

FCIC Program Integrity.

Collaboration in Action: Minnesota 4-RM Broadcast Soybean 

Referral Results in $183,133 in Savings

The Minnesota FSA Office forwarded a case to RMA’s 

Northern RCO in which a producer had broadcast seeded 

1,513 acres of soybeans in 2004 in Kittson County. The 

practice of broadcast seeding soybeans is an uninsurable 

practice without a written agreement, according to county 

actuarial documents. The RCO worked with RMA’s St. 

Paul Regional Office to verify that the policyholder did 

not have a broadcast seeding written agreement for his 

soybeans. The soybean acreage was deemed uninsurable. 

The RCO and AIP personnel interviewed the policyholder 

and the custom operator who had seeded the soybeans and 

conducted field inspections of the policyholder’s soybean 

acreage in other areas of Minnesota and North Dakota to 

ensure that Kittson County was the only broadcast seeded 

acreage. This cooperative investigation between FSA, 

RMA’s RCOs and Regional Offices, and the AIP resulted in 

a cost avoidance of $183,133. 

Collaboration in Action: 4-RM Prevented Planting Referral 

Results in $74,976 in Findings

The Texas FSA State Office referred a Colorado County 

cotton case to RMA. The RMA RCO review determined 

that only five entities, all related, filed prevented-planting 

claims allegedly due to excess moisture. No other producer 

in the area was prevented from planting. The RCO issued 

findings for an indemnity overpayment of $74,976 and 

premium overstatement of $19,734. The AIP agreed with 

the findings and corrected the claims.

Collaboration in Action: 4-RM Irrigated Grain Sorghum 

Referral Results in $92,978 in Savings

The Oklahoma FSA State Office referred a Cimarron County 

grain sorghum case to RMA stating that crops certified as 

irrigated were not irrigated. The RMA RCO requested 

that the AIP conduct a growing season inspection. The 

AIP review found that a portion of the crop was destroyed 

without consent or had already been harvested. The claim 

was denied, resulting in cost avoidance totaling $92,978. 

 Program Compliance and Integri     Annual Report to Congress January-Decemb04

Collaboration
15 risk management agenc

 Collaboration in Action: 4-RM Mississippi Referral Results in 

$326,564 in Savings

A Mississippi FSA State Office referral to RMA alleged 

poor farming practices in Leflore County on corn, cotton, 

and rice. The RMA RCO requested that the AIP conduct 

a growing season inspection and claims review. The AIP 

found damage to the crops due to uninsured causes, 

significantly reducing potential indemnity payments. The 

policyholder chose to withdraw claims filed on all three 

crops. This resulted in a cost avoidance totaling $326,564. 

RMA Consultatio

RMA and FSA State Committees continued to work together 

in 2004 to improve program compliance and integrity. In 

2004, RMA Regional Offices referred 145 issues to FSA 

State Committees for review and consultation. FSA State 

Committees referred three issues to RMA Regional Offices 

for their consideration.

 RMA Regional Offices continued to provide annual 

informational updates to the FSA State Committees 

about crop insurance issues, provided FSA offices with 

program fact sheets, and conducted review meetings on the 

consultative process.

Collaboration in Action: RMA and FSA Find Solution to 

Setting Transitional Yields for Apples in Washington State

During the consultation process between the Washington 

State FSA Committee and RMA, the two agencies 

collaborated on a review of transitional yields for apples 

in Washington State. The State FSA Committee reported 

that they believed there was a significant difference in yield 

potential for grafted apple trees as opposed to seedling trees 

planted in the same year. Prior to this request from FSA for 

a review of the issue, RMA’s transitional yield applied the 

same productivity levels to both new seedlings and grafted 

trees. Upon review of FSA State Committee and Extension 

Service recommendations, RMA revised transitional yield 

tables to reflect the higher yield capability of grafted apple 

trees in Washington, Idaho, and Oregon.

Collaboration in Action: FSA Assisted RMA with Tobacco 

Farm Yield Data

The Tennessee FSA State Office provided an RMA Regional 

Office data analysis on differences between FSA farm yields 

for Quota Tobacco versus average actual producer yields 

for the same farms. Elimination of the Quota Program 

for Burley Tobacco necessitated that RMA base its tobacco 

coverage on actual yields rather than FSA farm yields. The 

data provided by the Tennessee FSA Office greatly assisted 

RMA in this transition.

Dat

RMA and FSA began development of a Common Information 

Management System (CIMS) in 2003, which included a 

preliminary meeting of agency and crop insurance industry 

personnel and completion of the Office of Management 

and Budget and Office of the Chief Information Officer 

required documents. This project is designed to identify 

common and unique producer information reported 

to both agencies and to reduce the reporting burdens of 

producers, FSA, and AIPs. The CIMS project will improve 

the efficiencies of data exchange and reconciliation between 

RMA, FSA, and AIPs. CIMS will also bring a reduction 

of duplicate acreage information required to be reported to 

both programs, reduce misreporting and program abuse, 

and satisfy the ARPA requirement for reconciliation of 

producer-reported information to FSA and RMA.

 CIMS is being developed to address the requirement 

in Section 10706(b) of the 2002 Farm Bill, which states: 

“The Secretary shall ensure that all current information 

of the Federal Crop Insurance Corporation and the Farm 

Service Agency is combined, reconciled, redefined, and 

reformatted in such a manner so that the agencies can use 

the common information management system developed 

under this subsection.” CIMS is also an important part of 

the President’s e-Government initiative.

The scope of the project includes four components of 

core information: (1) producers (entities) and shares; (2) 

farm, field, and unit identifiers; (3) crops and acreage; and 

(4) production information required by both agencies. It 

is recognized that some differences exist between FSA and 

RMA programs. To the extent that such program rules 

differ, allowances will be maintained to account for the 

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differences. In areas where the rules are similar, efficiencies 

should be possible. CIMS will interface with approved 

RMA, FSA, USDA, and AIP applications collecting and 

reporting common information. CIMS will allow RMA, 

FSA, other USDA agencies, and AIPs access to use the 

shared, common information reported by producers. 

As previously reported in earlier Annual Reports 

to Congress, RMA and FSA have conducted a data 

reconciliation process, predating CIMS, that involved 

referrals of policies with data discrepancies to RMA. 

RMA then worked with the AIPs to conduct reviews of 

the policies. The AIP reviews for this older process were 

completed between 2001 and early 2004. The results of 

this older data reconciliation process are highlighted below. 

Collaboration in Action: Data Reconciliation Uncovers 

$934,998 in Overpaid Indemnities in Four States

FSA referrals to RMA’s Central RCO consisted of 1,394 

policies, which contained total premiums of $5,966,087, 

liabilities of $52,048,502, and indemnities of $12,061,633 

in Kansas, Nebraska, and Colorado. Discrepancies were 

identified on 124 of the policies (8.9 percent) reviewed, 

resulting in final premium overstatement of $200,696 (3.4 

percent) and indemnity overpayments of $934,998 (7.8 

percent). One policy was referred to USDA’s OIG for 

possible criminal or civil remedies in the State of Iowa. 

Collaboration in Action: Data Reconciliation Uncovers 

$144,679 in Overpaid Indemnities

This case was referred by FSA as part of the 1999 datareconciliation effort because of an unusually low yield 

reported on irrigated cotton. A review by RMA’s Eastern 

RCO found that the producer had a crop loss due to an 

uninsurable cause (nutrient deficiency); however, he was 

paid an indemnity based on excessive heat as the cause of 

loss. The producer revealed that he was having a legal dispute 

with his fertilizer supplier regarding fertilizer efficacy. The 

compliance office delayed issuing its findings until court 

depositions became available. The legal documents in the 

court case were considered indisputable evidence that the 

cause of loss was not insurable. Depositions confirmed that 

the AIP’s loss adjuster did not verify that loss resulted from 

insurable causes. The final determination, issued in 2004, 

identified $144,679 in an indemnity overpayment. The 

AIP agreed with this finding. 

Working

AIPs – those agents, loss adjusters, and other insurance 

personnel who provide and oversee the policies–are valuable 

allies in the first line of defense against fraud, waste, and 

abuse. AIPs are directly involved with the policies and 

producers/policyholders at the local level, and they 

therefore can give RMA and FSA valuable information 

about suspicious claims activity. They can also assist us by 

reviewing and investigating claims and managing the claims 

adjustment process. Referrals from AIPs help us maintain a 

proactive approach to combating potential fraud, since the 

majority of these kinds of referrals are investigated before 

the AIPs pay claims to the producers. RMA will continue 

to work closely with AIPs to detect, prevent, and correct 

fraudulent activity.

Manu

Manual 14, entitled Guidelines and Expectations for the 

Delivery of the Federal Crop Insurance Program, is a document 

that sets the minimum requirements for training, qualitycontrol review procedures, and performance standards 

for AIPs issuing FCIC policies. Manual 14’s purpose 

is to establish oversight and quality control of the AIPs’ 

performance. Manual 14 requirements will be incorporated 

into the 2005 SRA (p. 1).

Manual 14 requires AIPs to follow certain regulations in 

order to administer FCIC policies. To ensure that AIPs are 

following these policies, Manual 14 also requires that RMA 

conduct regular reviews of the AIPs’ compliance with FCIC 

procedures. 

One such review is the Compliance Crop Insurance 

Contract Review. Under this review, an AIP must conduct 

compliance reviews of a certain number of statistically 

selected indemnity claims from the previous crop year, 

based on the number of active contracts they have (with 

a minimum requirement of 50 reviews conducted for any 

provider). AIPs must verify that each of the claims examined 

was accurately reported to RMA, and that all documented 

information provided by the policyholder, sales agent, 

and loss adjuster is true and accurate. FSA State Offices 

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also assist in this review process by providing producer 

information, maps, and other program information and 

documents to AIPs upon request. FSA State Offices are 

integral to this process because they provide third-party 

verification of producer information that helps both the 

AIPs and RMA confirm that crop insurance indemnities 

were properly paid.

In 2004, all AIPs, with the assistance of FSA, completed 

1,575 Compliance Crop Insurance Contract Reviews of 

crop year 2003 indemnity claims, representing 43 crops 

in 38 States. Of these 1,575 reviews, AIPs uncovered and 

corrected 61 policy errors. 

Collaboration in Action: Tip from AIP Produces $451,366 in 

Cost Avoidance

This referral came to an RMA RCO from an AIP that 

requested assistance from RMA in determining correct 

potato indemnities for four Wisconsin producers. The AIP 

provided the documents that its loss adjusters had prepared 

prior to making a final settlement on the claims. With 

the assistance of the RMA Regional Office, Compliance 

personnel reviewed the documents and found that one 

producer had reported damage caused by a lack of water when 

the potatoes in this county required an irrigated practice 

for insurability. The producer said that the potatoes had 

never been irrigated. Additionally, the same producer had 

planted across section lines, thereby nullifying his optional 

units on two sections. On a second claim, an incorrect 

factor had been applied to the production to count on the 

production worksheet. Correcting these errors resulted in a 

cost avoidance of $451,366. 

Collaboration in Action: AIP Initiates Joint Review of Sales 

Agent by OIG/SIB, Results in Sanctions Recommendation

In 2003, an investigator with an AIP contacted OIG and 

advised that he had discovered, during the course of a 

mandatory review, that some of the acreage reports he had 

reviewed appeared to have signature dates prior to the dates 

the acreage reports were printed. He was suspicious of the 

validity of the dates on the acreage reports and all of the 

policies with these irregularities had been sold and serviced 

by one sales agent. OIG then contacted SIB for assistance 

and this case has been conducted as an OIG/SIB joint 

review. 49 of the 68 policies reviewed had been altered and/

or backdated. The total liabilities covered by the backdated 

documents are $3,588,933, and the total indemnities are 

$572,988. 

In 2004, OIG and SIB pursued the case but it was 

eventually declined for prosecution by the Assistant 

U.S. Attorney reviewing the case and then by a county 

prosecutor. It was sent back to the fraud Investigator at the 

Idaho Department of Insurance for possible administrative 

action against the sales agent. SIB then initiated a Request 

for Administrative Sanctions against the sales agent and 

recommended a debarment of 3 years for false statements. 

Other 

s

 Earlier in this report, we highlighted some of the changes 

in the 2005 SRA regarding RMA’s relationship with State 

regulators. These changes are extremely beneficial to the crop 

insurance industry and resulted in RMA strengthening its 

program integrity team with a powerful new collaboration. 

The State Insurance Commissions are now key players in 

RMA’s strengthened oversight system.

The RMA financial review team established formal 

relationships with State Insurance Commissions in 2004 

to ensure collaborative partnerships in sharing information, 

regulatory cooperation, and coordination. RMA worked 

with the National Association of Insurance Commissioners 

to develop a Memorandum of Understanding (MOU) and 

a standard disclosure agreement to enhance information 

sharing between RMA and the State Insurance Commissions. 

The completed MOU, with the National Association of 

Insurance Commissioners and the States, was signed in 

2004. Prior to its signing, RMA, as an interim measure, 

contacted each State Insurance Department prior to 

conducting on-site reviews to determine if they had recently 

reviewed the AIP and if there had been any information 

they could share regarding their findings. The National 

Association of Insurance Commissioners, the States, and 

RMA immediately began to formalize the data-sharing 

and regulatory-coordination process once the MOU was 

completed. 

Collaboration
Collaboration in Action: North Dakota State Insurance 

Department Refers Case to RMA 

Two individuals called the North Dakota State Insurance 

Department to report a producer that was cutting hay on 

prevented planting acres and then selling the bales. The 

Insurance Department notified RMA of this situation. 

RMA inspected the prevented planting acres and confirmed 

that they had been hayed. RMA notified the producer’s 

AIP. The AIP subsequently re-inspected the producer’s 

land and confirmed that 152.8 acres of prevented planting 

acreage had been hayed, thus violating the terms of the 

insurance policy. The producer was under the impression 

that the prevented planting acres could be hayed and had 

not checked with his agent before cutting. As a result, the 

AIP withdrew the prevented planting payment of $7,474. 

Collaboration in Action: Agent, Minnesota Department of 

Insurance, and RMA Work Together on Rebating Case

An independent insurance agent filed a complaint with 

RMA that alleged a Minnesota cooperative was rebating 

insurance premiums. The cooperative, acting as its own 

crop insurance agency, wrote policies throughout the 

county for an AIP. The cooperative paid approximately 

$4,200 in annual patronage dividends to its members. 

This dividend was based on the total volume of business 

a member did with the cooperative during the year. The 

qualifying business included goods and services purchased 

from the cooperative, including crop insurance premiums. 

This practice of including crop insurance premiums in the 

volume of business, upon which the dividend was based, 

was deemed rebating by the Minnesota Department of 

Insurance. RMA issued a cease-and-desist order to the AIP 

and the Department of Insurance advised the cooperative to 

stop the practice. Due to this investigation, the cooperative 

no longer includes crop insurance premiums when 

calculating the volume of business upon which dividends 

are based. This investigation helped keep a “level playing 

field” among crop insurance agents. 

Collaboratio

Collaboration in Action: RMA’s Regional Offices and RCOs 

Work Together To Correct Potato Program Vulnerability

An RMA regional office initiated a case with a compliance 

office in which a North Dakota potato policyholder had 

received large indemnities over 4 years due to possible 

weaknesses in the Northern Potato Storage Coverage 

Endorsement. RMA’s policyholder inquiry database 

showed that the policyholder had received $11.8 million 

in indemnities for crop years 1999 through 2003. Our 

investigation identified program vulnerabilities. The 

first vulnerability involved the Tuber Rot Table from the 

Northern, Potato-Loss-Adjustment Standards Handbook. 

RMA procedures allowed policyholders to receive crop 

insurance payments while still meeting or surpassing their 

crop insurance guarantee and delivery contracts. The second 

vulnerability identified by the compliance office was that the 

bin sampling procedures may not have been representative 

of the crop. The third identified vulnerability was in the 

APH guidelines in the Crop Insurance Handbook, which 

allowed a policyholder to avoid decreases in their APH even 

after repeatedly claiming losses on production. As a result of 

this input from the regional and compliance offices, RMA 

has taken action to correct the major issues listed above. 

Office 

RMA collaborates with OIG in many ways. As explained 

above, we provide significant support to OIG during the 

investigation and prosecution of criminal fraud cases. RMA 

also works closely with the OIG Audit staff to identify and 

resolve issues identified as a result of scheduled program 

and operations audits. Another vehicle for OIG and RMA 

collaboration is the OIG Hotline.

The OIG Hotline is a toll-free, confidential phone service 

to which anyone may report conditions they believe reflect 

dishonest agricultural practices. OIG screens the calls and 

refers certain cases to RMA to research, investigate, and 

take corrective action as needed. Once an RCO’s review 

is completed, the results are sent to OIG so they can be 

entered into its hotline tracking system. 

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Collaboration in Action: Joint Investigation Results in 

Sentencing of Loss Adjuster 

A former crop insurance loss adjuster, Gracchus H. 

Feldman, was sentenced to 2 years probation with the first 

6 months to be served as in-home confinement. Feldman 

was also ordered to pay restitution to RMA, with former 

crop insurance agent Wendell Mints, of $447,230. The 

sentence is a result of a guilty plea entered by Feldman in 

2002, in U.S. District Court, Northern District of Texas, to 

one count of conspiracy to make false statements to USDA. 

A joint RMA /OIG investigation found that Feldman 

facilitated the payment of over $500,000 in fraudulent 

1999 claims on Wilbarger County, Texas, cotton and grain 

sorghum policies belonging to Mints. At Mints’ direction, 

Feldman submitted claim documents with false appraisal 

determinations to the AIP. Feldman was sentenced 

November 1, 2004.

Collaboration in Action: OIG Referral from an AIP Uncovers 

Wrongdoing and $110,980 in Overpaid Indemnities in 

Kansas

An AIP reported to RMA that a policyholder submitted 

a fraudulent claim for payment. The policyholder alleged 

that the AIP did not properly administer his grain sorghum 

and wheat crop loss claims.

RMA’s investigation concluded that the loss adjuster 

and the policyholder misrepresented material facts on 

the policyholder’s claims. The policy was voided and the 

investigation found that the loss adjuster had failed to follow 

loss adjustment procedures and had failed to follow approved 

policy and procedures in the adjustment of claims of other 

producers in the area. The AIP paid these claims without the 

supporting documentation of unharvested potential. As a 

result, the AIP was requested to review all unharvested claims 

worked by this loss adjuster. The AIP corrected $104,721 

in overpaid indemnities, $8,743 in overstated premium, 

and $6,260 in indemnity overpayments on the original 

policy. The RCO recommended administrative sanctions 

against several individuals including the policyholder, the 

loss adjuster, and two AIP claims managers.

Collaboration in Action: OIG Audit Uncovers $17,889 in 

Overpaid Indemnities

As a result of an OIG audit of crop-insurance, claim 

payments, OIG alleged program abuse and/or improprieties 

in the losses paid by an AIP on six wheat and grain sorghum 

policies in the State of Kansas. RMA’s review verified that 

errors by the AIP resulted in indemnity overpayments 

totaling $17,889. For each of the six policies, RMA’s review 

determined the loss adjuster’s cause of loss entries were 

changed by the AIP without supporting documentation. 

The primary cause of loss (drought) determined by the loss 

adjuster was changed, because drought is not a valid cause 

of loss on irrigated acreage. In addition, an error in the 

determination of production to count was identified. 

S

RMA has the authority to impose administrative sanctions 

on producers who abuse the Federal crop insurance 

program. RMA is able to disqualify and impose civil fines 

against producers, agents, loss adjusters, and AIPs involved 

in fraudulent activities. RMA can impose a civil fine for 

each violation, up to the total dollar amount the individual 

obtained as a result of the false or inaccurate information 

provided, or $10,000, whichever is greater. Further, RMA 

has the authority to disqualify these individuals from both 

the Federal crop insurance program and most other farm 

programs.

RMA’s Sanctions Office and Appeals, Litigation, and 

Liaison staff (A&L) process referrals for sanctions. 

Sanctions Office and A&L responsibilities include:

 Reviewing all incoming sanction recommendations for 

adequate evidence and completeness;

 Preparing complaints;

  Working with OGC to secure legal sufficien

 Briefing the RMA Administrator on all cases and securing 

required signatures;

 Filing documents with the Administrative Law Judge;

 Participating in all aspects of the appeals process 

when invoked, including providing litigation support and 

attending hearings;

Collaboration
 Ensuring that all interested parties are notified when 

sanctions are imposed;

 Collaborating with OGC to develop evidence and 

documentation standards for sanctionable activities; and

  Working with RMA’s RCOs to ensure that their sanctio

referrals meet these newly developed standards.

A&L also processes referrals and appeals for suspension 

and debarment (7 C.F.R. sec. 3017), and performs similar 

functions to those listed above for that process. 

This year, both offices continued their lead role in 

processing disqualification actions against those involved in 

fraudulent crop insurance activities. Between January and 

December 2004, 81 sanctions referrals were received and 

67 sanctions were imposed, in the form of disqualification 

from the program, debarment, suspension, and/or civil 

fines. Another 69 sanctions cases are pending legal action, 

a process that can span more than one reporting period.

Collaboration in Action: Sanctions Referral Results in 

Disqualification and Civil Fines

RMA RCOs conduct High Loss Ratio Reviews to evaluate 

the reason for high loss ratios, ensure that proper loss 

determinations were made, and establish if the program 

met its intended purpose.

One such review in Delta County, Colorado, found that 

a Colorado producer sold his apple orchards in early 1995, 

yet retained crop insurance from 1995 through 2000, 

as part of an agreement with the buyer. The buyer paid 

the premiums and received the indemnities. The review 

determined that, since the seller had no insurable interest or 

share in the crop, he was ineligible to obtain crop insurance 

according to RMA rules and regulations. In addition, 

the RCO determined that the buyer failed to obtain crop 

insurance on additional apple acreage in the county. The 

case was referred for administrative sanctions based on 

false information provided by both parties. The sanctions 

hearing was held in 2003. The Administrative Law Judge’s 

decision on the sanctions was issued in 2004 in RMA’s 

favor. The sales agent that sold the policy stated that she 

was aware of the arrangement between the buyer and seller, 

and testified that it was her belief that this arrangement was 

in accordance with approved RMA policy and procedure.

The Administrative Law Judge determined that the 

buyer and seller would receive $10,000 fines and would be 

disqualified from receiving catastrophic risk protection or 

receiving non-insured crop disaster assistance from USDA 

for a period of 2 years and from receiving any other Federal 

crop insurance benefit for 10 years. 

Collaboration in Action: Sanctions Referral Results in 

Disqualification and Civil Fines

An OIG Hotline Complaint, and several additional 

complaints to an RCO, alleged false planting dates. As a 

result of its review, the RCO recommended administrative 

sanctions against an Iowa policyholder for intentionally 

misrepresenting material facts relating to his 1998 

insurance policy. The recommendation was based on 

evidence obtained in a joint investigation conducted 

by the RCO and the AIP. The investigation concluded 

that the policyholder falsified planting dates and falsely 

claimed volunteer soybeans as planted. Additionally, the 

policyholder filed a claim for prevented planting on 1998 

corn acres where the 1997 soybeans had not been harvested 

prior to the final planting date for corn. The investigation 

concluded that the policyholder intended to use these 

misrepresentations to ensure crop losses that would result 

in significant financial gain. The AIP voided the policy, 

resulting in a premium overstatement of $171,454 and cost 

avoidance of $1,763,049 in liability. 

Subsequently, the policyholder and his associates filed suit 

against the AIP. The jury found that the policyholders, or 

someone assisting them, intentionally misrepresented material 

facts and a judgment was entered in favor of the AIP. 

A settlement agreement was signed in 2004 between 

RMA and the policyholder, in which he agreed to be 

disqualified from purchasing catastrophic risk protection 

or receiving non-insured assistance for a period of 2 years, 

and disqualified from receiving any other Federal crop 

insurance benefit for a period of 8 years. In addition to 

disqualification, the policyholder agreed to pay a civil fine 

of $5,000.

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21 risk management agenc

Results

Results

In 2004, the RMA Compliance Office continued to 

work towards an ever-increasing level of productivity, 

innovation, and collaboration in our efforts to fight 

fraud, waste, and abuse in the FCIC program. This work 

has produced a number of successful results. Among 

other achievements described above, in 2004, RMA 

Compliance has:

 Conducted 9,722 policy reviews 

 Uncovered more than $13 million in incorrect indemnity 

payments 

 Recovered approximately $37 million in findings and 

recoveries 

 Produced more than $78 million in cost avoidance; $71 

million from the spot check list and $7 million from RCO 

non-spot-check-list data mining (p. 8)

 Implemented ways to manage and prioritize our caseload 

more effectively (p. 6) 

 Employed innovative technologies to proactively fight 

fraud, waste, and abuse (pp. 5-15)

 Investigated and uncovered high-dollar fraud cases and 

assisted in bringing them to justice (pp. 17-31)

  Heightened our collaborative efforts with FSA, AIPs, OI

and our other partners (pp. 20-31)

These are only a few highlights of our accomplishments 

during the 2004 calendar year. Such work adds to the 

efforts we have been making over the past 3 years to fulfill 

our ongoing mission to protect the integrity of the FCIC 

program for America’s agricultural producers. Since we first 

issued this annual report in 2001, we have seen increasingly 

substantial results, including a total of almost $165 million 

in findings and recoveries, and almost $366 million in cost 

avoidance.

RMA will continue our efforts to support our country’s 

agricultural producers in the important work they do, 

by striving to boost productivity, increase innovation, 

strengthen our collaborations, and eliminate fraud, waste, 

and abuse.