Ranchers Face Prison Time, Millions in Fines for Tampering with Rain Gauges

Two southeast Colorado ranchers were ordered to pay more than $6.5 million in fines and were sentenced to prison after pleading guilty to tampering with rain gauges in an attempt to collect crop insurance.

The Department of Justice announced that Patrick Esch and Ed Dean Jagers of Springfield, CO, agreed to the settlement to resolve allegations they defrauded federal crop insurance programs by tampering with and damaging rain gauges.

Federal prosecutors said that Esch and Jagers concocted a scheme to defraud the federal crop insurance program by making it appear there was less precipitation in their area than actual between July 2016 and June 2017. The DOJ said Esch and Jagers tampered with and damaged rain gauges in the area to prevent the accurate measurement of rainfall. Some of the rain gauges belonged to the National Oceanic and Atmospheric Administration and were operated by the National Weather Service.

Esch and Jagers cut wires on automated rain gauges, tipped over some collecting buckets, covered others with pie pans and agricultural disks and plugged another gauge with silicone caulk.

Prosecutors used civil tools to investigate Esch and Jagers, who violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act, and have agreed to pay a combined $3.5 million to settle the allegations. The claims resolved in the civil settlements are allegations, the DOJ said.  In agreeing to settle, Mr. Esch and Mr. Jagers did not admit liability except to the extent admitted in their guilty pleas.

The federal government also indicted Esch and Jagers criminally for their roles in the conspiracy. Esch and Jagers both pled guilty and were ordered to pay a combined $3.1 million in restitution.  Esch was also sentenced to be imprisoned for a term of two months.  Jagers was sentenced to be imprisoned for a term of six months. 

“Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused,” said U.S. Attorney Cole Finegan.  “This case also shows the full measure of justice that can be achieved when our office uses both civil and criminal tools to protect vital government programs.”