North Dakota potato farming Johnson brothers sentenced to prison for crop insurance fraud

Potato farming brothers Aaron Johnson of Northwood and Derek Johnson of Vancouver, B.C., will spend time in federal prison in the Federal Prison Camp in Duluth, Minn., and are jointly responsible for restitution of nearly $1 million because of crop insurance fraud. In a rare crop insurance fraud conviction, the Johnsons were found guilty on Dec. 11 and were sentenced on March 9.

Aaron, 50, was sentenced to four years in prison and five years of supervised release and will report to prison on April 13. Derek, in his late 40s, will serve 18 months in prison and five years of supervised probation, perhaps in a halfway house, and will submit to U.S. Marshals on March 10.

The two have 14 days to appeal the sentence.

The conviction was based on crop insurance fraud from 2002 to 2007, but U.S. District Judge Ralph R. Erickson based the money losses sentence solely on the 2006 crop season. That’s a year in which investigators from the U.S. Department of Agriculture’s Office of Inspector General intensified their case and found the Johnsons had applied heat, frozen potatoes and Rid-X, a sewage system enzyme treatment, to their potatoes to make them rot and ensure crop insurance payments.

Jointly liable

Erickson confirmed that federal officials can start to sell any farm machinery or farmland owned by Aaron or Derek Johnson to satisfy the restitution. The judge specifically said neither of the brothers is less liable for the restitution.

New details emerged in Monday’s sentencing hearing.

Mark Price, a USDA Risk Management Agency investigator, said Aaron planted only a third of the minimum certified potato seed recommended for irrigated Yukon Gold potatoes, for which he received crop insurance benefits. Derek purchased and planted half the minimum recommended red potato seed on acres for which he received crop insurance payments.

Price said there have only been six crop insurance convictions nationally since 2012, and only one in 2014.

Erickson said the Johnsons’ actions harmed taxpayers, but also other farmers because their poor results would count in county averages for crop insurance. He said their family responsibilities, which both cited as reasons for leniency, could not be counted.

Both defendants made statements in their sentencing.

Aaron said he worried about his family.

Erickson said Aaron has a smart wife and two strong sons, and that the law doesn’t allow for simple sympathy. Erickson noted that the Johnsons were guilty of a “white collar” crime, concocted solely for greed.

He said the fraud is “economic,” and was “cold, calculating in the light of day.”

In his statement, Derek became emotional, and said he’d “lost everything” because he could not return to Canada, where his wife and her children live, and where he started a construction business in the past seven years.