A farmer from Niles, Michigan, has agreed to pay $87,500 to resolve allegations that he violated the False Claims Act by fraudulently claiming federal crop insurance and Farm Service Agency (FSA) benefits for crops he did not grow.
According to the United States Attorney’s Office for the Western District of Michigan, David G. Zelmer, a Berrien County landowner, leased a portion of his land to another farmer between 2015 and 2017.
Despite leasing the land, Zelmer allegedly certified that he was the sole producer of the crops grown on those tracts when applying for FSA benefit payments and crop insurance coverage, even though he was not farming them himself.
“Michigan farmers rely on federal programs for economic support,” said U.S. Attorney Mark Totten. “The integrity of these programs is dependent on honesty and compliance with the rules. My office is committed to investigating and prosecuting those who make false claims.”
FSA crop insurance premiums paid by farmers are heavily subsidized by taxpayers. According to the Environmental Working Group (EWG), taxpayers fund approximately 63% of total premiums, which means farmers pay only about 37% of the actual cost of their crop insurance policy.
If farmers suffer significant losses that are not covered by their insurance premiums, such as drought, hail, excessive heat, or freeze damage, taxpayers are also liable for some of the additional indemnity payment obligations.
According to the Environmental Working Group, the federally funded crop insurance program has spent more than $8 billion on crop insurance premium subsidies in recent years.
Their data show that payments have rapidly increased from just over $1.5 billion in 1995 to a record high of $19.2 billion in their most recent report as of 2022, with climate crisis increases cited as a possible factor.
Shantel R. Robinson, Special Agent-In-Charge of the USDA’s Office of Inspector General (USDA-OIG), emphasized that crop insurance fraud undermines the program’s purpose and wastes taxpayer money.
“We are grateful for our partnership with the U.S. Attorney’s Office and USDA’s Risk Management Agency in addressing this issue,” she told reporters.
This resolution was the result of a joint investigation by the United States Attorney’s Office for the Western District of Michigan, USDA-OIG, and USDA’s Risk Management Agency. Andrew J. Hull, an Assistant US Attorney, prosecuted the case.
While Zelmer’s agreement to settle is not considered an admission of guilt or liability because he did not receive a guilty verdict in court, the case emphasizes the importance of oversight in federal programs funded by taxpayers to prevent the draining of essential funds for those who truly require assistance — and to ensure taxpayer dollars are used for their intended purposes.
