A Largely Unnoticed Sphere of Fraud
One area of fraud against the government that you might never suspect of existing is fraud involving our food supply, at all levels, from providing credit to both growing food and buying agricultural commodities, to the selling of tainted food to government programs. It all comes under the umbrella of the United States Agricultural Department (USDA).
As is the case with almost all fraud against the government, millions upon millions of dollars are at stake.
International Money and Credit Fraud
An $80 million recovery occurred in a 2014 judgment against the Paris-based financial institution BNP Paribas. The reason for the judgment concerned violations of the USDA’s Supplier Credit Guarantee Program. With this program, the USDA guarantees credit for foreign importers to make agricultural commodity purchases, which provides more markets for U.S. commodities sellers . . . a good thing. It is alleged that the bank knowingly participated in a scheme to defraud the program by involving itself with disqualified exporters and importers, leading to transactions that involved no sale or shipment of agricultural commodities.
One nationwide 2014 case involved more than $175 million in fake USDA-backed loans that were sold to banks, retirement funds, and other investors. The loan scheme originated with an Orlando, FL, businessman and his wife, who employed inside information to manipulate the USDA’s system via First Farmers Financial, a lending company. A number of credit unions across the U.S. became victims of the scam. A settlement or judgment in the case has not yet been reached.
Food Supply Fraud and the Unethical Treatment of Animals
One qui tam whistleblower case sparked an investigation that led to a judgment over selling adulterated meat to the USDA’s National School Lunch Program. In this program, the meat is distributed to state agencies, which then send the food to local school districts, with the food ending up in the stomachs of schoolchildren. You can see how important it is that meat products from healthy animals end up on school lunch plates. But in this case (and as is suspected in some other instances), the food was not processed in accordance with government specifications. Besides the suspicious condition of the meat, it was also alleged that inexcusable mistreatment of cattle destined for slaughter occurred.
The eventual settlements, of which there were several in this case, added up to over $158 million. The settlements in question arose from a qui tam suit filed by the Humane Society of the United States (HSUS) in early 2008 against a California meat-packing plant. One of the allegations is that the plant mistreated cattle. The law states that meat processors are not allowed to slaughter animals that cannot walk or that are otherwise disabled. As distressing as that fact is to contemplate, perhaps the more significant part of the suit is that animals which may have been sick—“downer cows” as they are known—were slaughtered and sold for food, which is clearly against the regulations of the Federal Meat Inspection Act. The sale of the meat of “downer cows” to meal programs destined for children—meat that could be considered adulterated and therefore unfit for human consumption—violates federal regulations and constitutes fraud against the government under the False Claims Act (FCA).
Because of this case, the USDA has called for more inspections by the Food Safety Inspection Service (FSIS) to ensure that meat-processing plants follow the requirements of the Federal Meat Inspection Act.
Did you know that Supplemental Nutrition Assistance Program (SNAP) fraud, otherwise known as food stamp fraud, concerns the USDA? The agency has procedures in place for dealing with such fraud, as do a number of our states. A steady flow of food stamp trafficking—meaning the illegal sale of SNAP benefits for cash or other items—continues to be a problem. Eliminating the networks of criminals who engage in this activity remains high on the USDA’s list of priorities.
As with many kinds of fraud against the government, the USDA wants to know about fraud that includes the following actions:
- Criminal activity such as theft, bribery, smuggling, the endangerment of public health or safety
- Mismanagement or waste of funds
- Conflicts of interest
- Any other employee misconduct or violence related to fraud.
Because whistleblower cases are usually extremely complex, it is advisable to speak with an attorney who will help you each step of the way.
Reasoned advice from seasoned professionals.
If you have knowledge concerning fraud against the government, whether it involves our food supply, food stamps, or other matters, an experienced whistleblower attorney like the ones at the Louthian Law Firm can assess your case and help you file the necessary disclosure statement. In some instances, the government will intervene (take part in your lawsuit).
One of the most important reasons to contact a qualified whistleblower attorney is that you are much more likely to meet with success if your claim is clear, concise and substantive. The Louthian Law Firm can help you structure your claim in such a way that the government will be more likely to intervene in your case, possibly increasing the chances that you will recover reward money. Even if the government doesn’t decide to intervene, it might still be advisable to pursue your case without government involvement, with our strong support through every step of the process.
For a free, confidential evaluation of your case, call the Louthian Law Firm today at (803) 454-1200 or fill out the online contact form.