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Published December 08, 2014, 10:05 AM

Johnson brothers trial underway

Jurors in a federal crop insurance fraud trial in Fargo, N.D., were alerted that they’ll have to make a judgment on the credibility of a former hired hand in a case against farming brothers Aaron and Derek Johnson of Northwood, N.D.

By: Mikkel Pates, Agweek

FARGO, N.D. — Jurors in a federal crop insurance fraud trial in Fargo, N.D., were alerted that they’ll have to make a judgment on the credibility of a former hired hand in a case against farming brothers Aaron and Derek Johnson of Northwood, N.D.

Lawyers offered opening arguments on Dec. 2 in the case that alleges the brothers intentionally conspired to damage crops — both in the field and in the bins — to maximize crop insurance returns. The Johnsons say they’re not guilty.

A key to the case will be Leo Borgen, a former Johnson Potato Co. employee, who reported the case to Guy Mitchell, an official for the insurance company.

Borgen is incarcerated at James River Correctional Facility in Jamestown, N.D. In 2010, he was convicted of drugging and sexually assaulting another man. He testified Dec. 3 in front of the jury of 11 women and three men in the Johnson trial.

“This is an intentional fraud case,” said Prosecutor Nick Chase in his opening statement. He said the brothers — being tried separately, but in concert — played a role in a cover-up by lying about it to officials of the U.S. Department of Agriculture’s Risk Management Agency, which oversees crop insurance, and the Farm Service Agency, which oversees federal disaster payments.

Richard Henderson, Aaron’s lawyer, predicted the government will not be able to prove “deliberate damage,” and without that there’s no case.

He said if the insurance company suspected fraud, it could have collected physical samples of the potatoes, but did not. He said marketing data don’t support the theory that insurance was the Johnsons’ best option.

Focus on 2006 crop

Chase said much of the evidence would focus on the 2006 crop, but that the case involves allegations across several years. He said the fraud occurred in a “tight-knit potato farming family,” within a “tight-knit potato-growing community.”

He said the Johnsons added Rid-X, a bacteria used to clean septic systems, to potato seed before planting it, sometimes bragging about it, and in one case suggesting another farmer do it. He said they also intentionally damaged crops in the field, and applied Rid-X to stored crops.

Chase said when the market prices declined, the Johnsons used chemicals, heat and added frozen or spoiled potatoes in storage near Cooperstown, N.D., to make the potatoes qualify for payments under crop insurance.

Aaron Johnson reportedly blamed storage problems on the Cooperstown building’s dirt floor. Jim Harmon of Carrington, N.D., a former president of the North Dakota Farm Bureau, who had been a potato farmer and operated the same storage building before the Johnsons took it over, testified Dec. 5 that he didn’t have any problems with the building’s clay floor.

Whistle blower

Ben Thomas, an attorney for Derek, told the jury it needs to consider evidence for each of the brothers separately, but added, “The only thing worse than being blamed for something your brother did is being blamed for something your brother didn’t do.”

The prosecution’s last witness on Dec. 5 was Roger Erickson, a compliance officer for RCIS, the crop insurance company. Erickson said Borgen approached him a month or two after a field and storage inspection of 2006 crop potatoes to report insurance fraud and the use of Rid-X to spoil potatoes.

“He said they did it all of the time,” Erickson testified.

Neither of the Johnson brothers testified and it is unclear whether they will.

The trial is scheduled to resume Dec. 8.

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