Colorado ranchers sentenced after tampering with rain gauges to increase crop subsidies
Two southeastern Colorado ranch owners were recently sentenced to pay $6.6 million to resolve federal charges that they damaged or altered rain gauges in an effort to get paid for worsening drought conditions.
By preventing the rain gauges from accurately measuring precipitation, the men aimed to increase the amount of money they could receive from the federal government, according to court documents.
Patrick Esch, 72, and Ed Dean Jagers, 62, both of Springfield, received short prison sentences - Esch two months and Jagers six. They also were ordered to pay a combined $3.1 million in restitution - the estimated amount of fraudulently inflated funds they received from the Federal Crop Insurance Corporation. As well, they agreed to pay a combined $3.5 million to settle the allegations.
The cases against Esch and Jager included civil allegations and criminal charges accusing the men of making false statements and defrauding the federal government, in addition to the physical tampering of the rain gauges.
"Hardworking farmers and ranchers depend on USDA crop insurance programs, and we will not allow these programs to be abused," U.S. Attorney for the District of Colorado Cole Finegan stated in a press release. "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."
The Jager and Esch plea agreements describe two other people who were involved in the conspiracy. Those two people were not identified.
The group allegedly damaged rain gauges located in Springfield, Ordway, La Junta, Walsh, and Ellicott, Colorado, and others in Syracuse, Coolidge, and Elkhart, Kansas. Wires were cut, funnels to rain collectors were filled with silicone, holes drilled or punched in collectors, parts of collectors were disassembled, and objects such as cake pans or pie tins were placed over the gauges during rainstorms. The incidents occurred between July 2016 and June 2017.
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The affected gauges are part of the Automated Surface Observing System operated by the National Weather Service and the National Oceanic and Atmospheric Administration. There are more than 900 of the units nationwide. ASOS "serves as the nation's primary surface weather observing network," according to the NWS.
The scheme was designed to benefit Jagers through his crop insurance, the Rainfall Index Annual Forage Insurance Plan, which is one of several agriculture subsidies administered by the U.S. Department of Agriculture's Federal Crop Insurance Program.
Federal crop insurance is typically sold through private insurance companies who are subsequently reimbursed by the federal government. The Rainfall Index plan covers annual crops and "is focused on the amount of precipitation, not on actual crop production," as described by prosecutors in a case document. "This means that a farmer can receive a payment when precipitation is below the historical normal level even if the relevant farmland suffers no loss in productivity."
Jager filed claims on the falsified lower precipitation measurements, thereby increasing the benefits received from his crop insurance policy. In return for their rain gauge activities, Esch and the two unidentified co-conspirators received payouts, as outlined in the plea agreements.
Incidentally, one of the co-conspirators turned on the group and extorted Esch in particular. The unidentified male threatened to expose the entire enterprise to authorities in exchange for Esch paying the man's bond for release from jail and giving several five-figure payments to the man's girlfriend. Esch, according to his plea agreement, even shrugged off the man's admitted theft of an all-terrain vehicle from Esch in exchange for the man's silence.
In August of 2023, a month before Jager and Esch reached their plea agreements with prosecutors, this unidentified male co-conspirator escaped from prison. This triggered a nationwide manhunt and caused Esch and his family "to go into hiding," as stated in a court document. Two weeks after the escape, the co-conspirator was found dead.
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Prior to reaching the settlements with prosecutors, Jager and Esch faced between 30 and 46 months in prison based on the charges against them.
Both Jager and Esch were ordered to begin serving their prison time on January 25 - Jager at a federal prison in Florence and Esch at another in Englewood.
Additionally, Jager and Esch both engaged in previous litigation against the federal government regarding conflicts over federal subsidies, according to public documents.
