A Warsaw-based crop insurance company and its CEO have agreed to pay a $500,000 fine after being accused of filing false federal crop insurance claims.

Federal prosecutors say Silveus Insurance Group, Inc. and its CEO James Cameron Silveus acted on behalf of Michigan farmer Gaylord Lincoln to file federal crop insurance claims and receive more federal farm benefit program payments than he was legally entitled to receive.

According to a statement from the US Department of Justice, Lincoln placed some of his farm properties and crops under the names of his hired farm laborers who served as “straw” farm operators. Lincoln then ordered his employees to obtain federal crop insurance policies in their names to insure the land and crops, even though these belonged to Lincoln.

Federal investigators say Lincoln then received payments in the form of subsidy premiums and claims on bogus policies through the Federal Crop Insurance Corporation. In addition, Silveus and the company are accused of having benefited from the payment of administrative costs thanks to the money paid by these claims.

As part of the settlement, Silveus Ins. Group, Inc. also agreed to a one-year monitoring period with the US Department of Agriculture’s Risk Management Agency and Silveus agreed to a one-year exclusion from federal programs.

Additionally, prosecutors say the case against Lincoln is pending separately in federal court.

“The federal crop insurance program is designed to promote national welfare by creating economic stability for farmers,” said U.S. Attorney Andrew B. Birge. “This system relies on producers and their insurance agents to submit truthful and complete information, and my office is committed to investigating any allegations of fraud regarding the federal crop insurance program.”