Two sentenced in massive crop-insurance fraud case
Posted January 14, 2011 8:56 a.m. EST
Raleigh, N.C. — Two men were sentenced Thursday and an accused ringleader will soon face sentencing for their roles in a crop-insurance fraud and money-laundering scheme that cost the federal government millions of dollars.
Twenty-one people have been charged in the scheme, in which farmers hid actual crop production and then filed false insurance claims to collect losses from the government, according to court papers.
Mark Davis Pridgen, 62, of Wilson, was sentenced to 1½ years in prison, followed by three years of supervised release.
He was also ordered to pay restitution, including more than $10 million to the United States Department of Agriculture, $188,0014 to the Rural Community Insurance Company and $13,007 to the American Agri-Business Insurance Company.
He pled guilty in October 2009 to conspiring to make false statements, making material false statements, committing mail fraud and wire fraud, and conspiring to launder money.
Prosecutors said that Pridgen participated in the crop-insurance fraud scheme as a partner in the Beaufort Tobacco Company and officer with the Tobacco Insurance Agency Inc. in the late 1980s and early 1990s.
He also made $647,000 selling crop insurance through the Halmart Agency between 2003 and 2006, but the policies weren't valid, because he hadn't had a valid insurance license since 1991, prosecutors said.
Roy Johnson Raynor, 56, of Rocky Mount, was sentenced to a year in prison, a year under house arrest and a year on supervised release. He was also ordered to pay a $100,000 fine.
He pled guilty last July to making false statements, making material false statements and committing mail and wire fraud.
Prosecutors said that Raynor took part in the crop-insurance fraud scheme as the owner of Raynor Warehouse Inc. and Raynor Seed Company between September 2005 and March 2009. Over a two-year period, he made out 130 checks totaling $1,451,084 under false names or to co-conspirators.
Both Pridgen and Raynor received reduced sentences because of their cooperation with the extensive investigation, prosecutors said.
The accused ringleader of the scheme is Wilson insurance agent Robert "Carl" Stokes, who owned Hallmart Agency Inc.
Federal agents have said that Stokes posted some of the highest numbers for crop losses among insurance agents across the country, and an undercover sting operation determined that some of his business dealings were fraudulent.
Part of the conspiracy was selling tobacco under other people's names to conceal the actual farmers’ true tobacco production totals. People received money in exchange for the use of their names as the actual grower, facilitating false federal crop insurance claims by the actual farmers, authorities said.
Others who have pled guilty to various charges in the case include Kenneth Kelly, Roland McCoy Jr., Joseph Edward Williams, of Zebulon, Robert Veasey, of Durham, David Harrison, of Snow Hill, William Earl Dawson, of Statonsburg, Robert Lemuel Dawson, of Statonsburg, Travis E. Wilson, of Cove City, Dennis Hawley, of Wilson, and Fernan Sanchez, of Warsaw.