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LA Times: http://www.latimes.com/business/la-f...,7267369.story

Crimes are being perpetrated by farmers who fraudulently claim that weather or insects destroyed their crops to cash in on a government-backed insurance program. Some cheats never bother planting at all. Others sell their harvests in secret and then file claims for losses, collecting twice for the same crop.

One North Carolina tomato grower, armed with a camera and a party-size bag of ice cubes, created a mock hailstorm in his fields and swindled the federal government out of $9.2 million.

These growers — along with crooked insurance agents and claims adjusters — are using the program to bilk insurance firms and the U.S. government out of millions of dollars a year, according to prosecutors, industry officials and high-tech experts who review questionable claims for the U.S. Department of Agriculture.

Taxpayers are on the hook for many of those losses.

The federal government has been fighting back against such criminals, using satellite technology, advanced data-mining techniques and other tools to spot fraud. The penalties, too, have grown stiffer. These efforts have saved taxpayers at least $730 million over the last decade, by some estimates.

...

In 2009, taxpayers shelled out nearly $4 billion to the 16 insurers involved in the program, according to the USDA's Risk Management Agency, which administers the program. Of that, $1.5 billion was paid in commissions to an estimated 15,000 insurance agents. Because there were more gains than losses, the USDA said it retained $1.4 billion, some of which came from farmers' premiums.

Meanwhile, taxpayers paid $1.7 billion to subsidize farmers' premiums.