Feds want to take 1,300 acres and $575,000 from KY farmer in insurance fraud case
The government wants to take up to 1,300 acres of land and $575,000 from a Central Kentucky farmer if he is convicted in an alleged conspiracy to file false crop insurance claims.
The request is included in an indictment against Earl Lee Planck Jr., of Nicholas County, handed down as part of an investigation of widespread crop insurance fraud in Central Kentucky.
Planck is charged with conspiracy to make false statements in applications and claims for crop insurance; conspiracy to commit wire fraud, mail fraud and money laundering; making false statements; and tax evasion.
R. Chad Price and Jesse G. Smith, also of Nicholas County, were indicted with Planck.
The indictment includes a request to take millions in assets if prosecutors can show they were tied to the alleged fraud.
It lists a dozen pieces of property in Nicholas County in Planck’s name or the names of a family trust and a business, as well as cash from two accounts and checks signed by his daughter.
With that indictment, handed down Feb. 6, more than a dozen people have been convicted or charged in the insurance-fraud investigation, which surfaced in late 2015 when federal agents searched several places in Mount Sterling.
The most recent conviction in the investigation came Jan. 23 in a guilty plea by Timothy Douglas Snedegar on a charge of conspiracy to commit wire fraud.
Snedegar worked as an insurance adjuster who examined claims of crop damage. He admitted helping file false claims that included photos of damaged tobacco leaves from farms other than those in the claims.
Snedegar said he took kickbacks from people to help with the fake claims. Those he said paid him were identified only by the initials M.M. and B.M.
Others facing charges in the investigation include Michael McNew, an insurance adjuster and agent.
He is charged with conspiring with farmers and others to submit applications for crop insurance and damage claims that had false information. He has pleaded not guilty.
In another new indictment in the investigation, McNew’s wife Karen Ann Nickell, an insurance adjuster also known as Karen Lane and Karen McNew, was charged Feb. 6 with taking part in making false statements in insurance documents.
Court documents indicate there could be more charges in the case.
Several cases include initials of other people allegedly involved in fraud, and in his plea agreement, Snedegar said he shared fake test sheets and photos with other adjusters and handled claims for “dozens” of farmers between 2012 and 2015 that he knew were false.
Crop-insurance policies are backed by the U.S. Department of Agriculture. That’s why the investigation is being handled by federal authorities.
Indictments returned so far allege millions in fraud.
Planck raised tobacco, corn and soybeans in Clark, Nicholas, Bath, Bourbon, Fleming and Montgomery counties.
Planck allegedly took out insurance in other people’s names to keep down scrutiny, lied about how much tobacco he grew and filed false damage claims.
Mary Trotman, a special agent with the FBI, said in a separate 2016 affidavit that Planck received insurance payments totaling $1.52 million from 1994 through 2014.
In some cases, Planck filed claims for damage to tobacco crops he said he grew on a piece of land that was actually steep and heavily wooded, which investigators said was not capable of being used for crops, Trotman said.
Planck and his daughter reported planting a total of 45 acres of tobacco on that land in 2012, even though the maximum size of the field was 34 acres, Trotman said in her sworn statement.
An analysis by Jeffrey Monnin, a special agent for the U.S. Department of Agriculture, showed that Planck reported producing far less tobacco per acre than the average amount produced by growers countywide in several years.
Planck claimed he only harvested 11,221 pounds of burley tobacco in 2011 and 15,144 in 2012. However, he came up short only 533 pounds on contracts to sell a total of 250,000 pounds of burley to tobacco giant Phillip Morris International those years, Trotman said Monnin’s analysis showed.
Price is charged in the case with conspiracy to make false statements, making false statements, conspiracy to commit mail fraud, wire fraud and money laundering, and tax evasion.
Planck and Price allegedly claimed they had no taxable income some years when they actually did.
Smith, the third man indicted in the case, is charged with making false statements. Federal authorities believe Planck used Smith as a “straw farmer,” obtaining crop insurance in his name, and that Smith lied about the ownership of the insured crops.
Some charges against the three carry a maximum sentence of 30 years in prison.
