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Cattle Involved Fraud

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Anonymous

Guest
Heres a little cattle involved Fraud scheme that took place in our area....Things like this makes getting money for the honest producer/buyer a little tougher.... :(

North Dakota cattle buyer convicted in $7.8M scheme



By CLAIR JOHNSON

Of The Gazette Staff

The Billings Gazette - Montana

2/13/2009



A North Dakota cattle buyer who drove bankers around Eastern Montana showing them cattle he falsely claimed were his was convicted Thursday in a $7.8 million scheme to defraud banks.



The jury deliberated about an hour and a half in the four-day trial before finding Todd Kenneth Horob, 40, of Williston, guilty of all seven counts in an indictment. The charges included false statements to a bank, bank and wire fraud, money laundering, bankruptcy scheme to defraud and aggravated identity theft.



Testifying in his own defense, Horob claimed that other witnesses were wrong and denied providing false brand inspection certificates and other false documents to hide the fraud.



Assistant U.S. Attorney Ryan Archer said Horob had built a "house of cards" through deceit and money laundering. The business world, especially the cattle industry, is based on trust and handshakes, Archer said, and "Mr. Horob abused that trust on many levels."



Horob's scheme collapsed into bankruptcy, where he continued lying on his petition and in a deposition, Archer said.



The investigation by the FBI found that Horob spent money loaned to buy cattle on other things and that he lost more than $2 million in the cattle futures market.



Wells Fargo Bank, which loaned Horob $5.8 million, caught on and sent bankers searching for cattle Horob claimed to have purchased with the money, Archer said. "They didn't find cows," he said.



There were only the 60 cows that Horob listed in his bankruptcy petition, not the 6,800 cows he told Wells Fargo he had a few weeks earlier, he said. Horob filed for bankruptcy March 2006 in Billings.



Horob was president of Horob Livestock Inc., a North Dakota company with big debt and lines of credit with Wells Fargo in Minot, N.D. From March 2003 until September 2005, Horob borrowed $5.8 million from the bank to finance his cattle-buying business.



Horob also formed H&J Livestock LLC with his partner and ranch hand, James Johnson, and borrowed more than $2 million from Dakota West Credit Union, based in Watford City, N.D. Horob used Johnson's personal checking account with the Wolf Point Federal Credit Union to launder money, Archer said.



In one instance, Horob used Johnson's account to redirect a Wells Fargo loan of $950,000 to buy 775 stock cows to pay off a loan of $858,543 that H&J had at Dakota West. No cows were purchased, Archer said.



In another loan, Horob got $950,000 from Dakota West to buy 1,276 steers and provided the credit union with a fake buyer's bill for the purchase. Horob used most of the money for purchases unrelated to livestock, Archer said.



Johnson, of the Wolf Point area, testified that he let Horob use his checking account but didn't understand at the time what Horob meant about the account looking better to the banks. Johnson said he gave Horob a book of signed blank checks and that Horob filled in the rest. He didn't know what the money was for or where it went, Johnson said.



Horob also asked him to find "a big bunch of cows" to show bankers, Johnson said. He complied even though he knew the cows didn't belong to Horob, he said. Johnson and Horob drove bankers to pastures to see cattle belonging to other ranchers in the Brockway area.



Both men have pleaded guilty to state felony charges in McCone County for the bogus cattle tours. Johnson was sentenced last year to a three-year deferred term for deceptive practices by accountability. Horob is to be sentenced March 5 for deceptive practices.



Two feedlot owners in Montana and Nebraska also testified they lied for Horob when they showed bankers cattle purportedly owned by Horob.



Steve Lunderby, who owns a feedlot in Sidney, said that in March 2006, he let Horob show bankers about 390 head of cattle he claimed were his. In fact, Horob had no cows at the lot, Lunderby said. When the bankers returned to repossess the cattle, Lunderby said he lied and told them Horob had shipped out the cattle. Lunderby called his actions stupid and said he had trusted Horob.



Chief U.S. District Judge Richard Cebull set sentencing for May 14 and continued Horob's release. Horob faces a maximum of 30 years in prison and a $1 million fine on most of the fraud counts plus a mandatory consecutive two years on the identity theft count.



billingsgazette.net
 

Red Barn Angus

Well-known member
I hate to see these things happen because they just make it tougher for the rest of us. I do have a problem with a million dollar fine. I agree he needs punishment but the court will never collect that kind of fine and, if they did, it would just take the money from the rightful owners, the lenders. Unless the crook has several legal entities that are protected he has lost it all anyway. He doesn't care what size the fine is....it isn't his money anyway.
 

George

Well-known member
We had a similar theft happen here about 10 years ago.

A man formed a corporation and even had a past Gov. of Colorado as a partner. It took about 5 years before they caught up with him and it seems he was the only crook in the bunch as most of the others were fron out of state and he would drive them around and show them cattle that were supposed to belong to the corporation but when the house of cards fell there were only about 60 head and about 5,000 head of non existing cattle. He only spent about 2 years in jail then when he got out he was convicted of selling corn that was under goverment loan and did a little more jail time.

He then got into real estate fraud but is to ill ( cancer ) to stand trial - - - It looks like God decided he has had enough chances and is going to remove him !
 

Blkbuckaroo

Well-known member
That's pretty sickning,the worst part is he was continually given operating loans,without any real verification of ownship of said cattle.Bankers should have done better monitoring of assets.Bet they won't be giving thier loans out very easy anymore.
 
A

Anonymous

Guest
Blkbuckaroo said:
That's pretty sickning,the worst part is he was continually given operating loans,without any real verification of ownship of said cattle.Bankers should have done better monitoring of assets.Bet they won't be giving thier loans out very easy anymore.

Ya- I'm kind of surprised that the banks let it get away so long... He must have been a smooth talker....

Around here usually the local banks want a lien on your brand- all the cattle branded with that brand and brand inspection receipts... Over the years I've seen some of those old bankers that could spot one of their liened brands 1/4 mile away- and showed up every time the cattle were worked or shipped...A few were even decent help... :wink:
 

kolanuraven

Well-known member
Oldtimer said:
Blkbuckaroo said:
That's pretty sickning,the worst part is he was continually given operating loans,without any real verification of ownship of said cattle.Bankers should have done better monitoring of assets.Bet they won't be giving thier loans out very easy anymore.

Ya- I'm kind of surprised that the banks let it get away so long... He must have been a smooth talker....

Around here usually the local banks want a lien on your brand- all the cattle branded with that brand and brand inspection receipts... Over the years I've seen some of those old bankers that could spot one of their liened brands 1/4 mile away- and showed up every time the cattle were worked or shipped...A few were even decent help... :wink:

See, that's what I was wondering also.

The guy must've got ahold of a load of bankers that didn't know squat about their business.......Imagine that???????? :wink: :wink:
 
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Anonymous

Guest
A few years ago my neighbor up the creek sold his calves..Since he had a lien on the brand- by law the buyer had to make out the check to him and the bank...He headed to the Bank- and I went to the waterhole to meet him and get my inspection fee and checkoff fee...

When he walked in he was flipping a silver dollar- said that after he paid off his operating note there wasn't anything left- so the banker felt so sorry for him he gave him the silver dollar so he could say he made a profit for the year :wink:
 

Blkbuckaroo

Well-known member
Oldtimer said:
A few years ago my neighbor up the creek sold his calves..Since he had a lien on the brand- by law the buyer had to make out the check to him and the bank...He headed to the Bank- and I went to the waterhole to meet him and get my inspection fee and checkoff fee...

When he walked in he was flipping a silver dollar- said that after he paid off his operating note there wasn't anything left- so the banker felt so sorry for him he gave him the silver dollar so he could say he made a profit for the year :wink:
Talk about adding insult to injury :? At least he was able to pay his bills i guess.
 
A

Anonymous

Guest
Blkbuckaroo said:
Oldtimer said:
A few years ago my neighbor up the creek sold his calves..Since he had a lien on the brand- by law the buyer had to make out the check to him and the bank...He headed to the Bank- and I went to the waterhole to meet him and get my inspection fee and checkoff fee...

When he walked in he was flipping a silver dollar- said that after he paid off his operating note there wasn't anything left- so the banker felt so sorry for him he gave him the silver dollar so he could say he made a profit for the year :wink:
Talk about adding insult to injury :? At least he was able to pay his bills i guess.

Yep- and he said "Darn- the Banker renewed the operating loan so I can work another year for nothing"... :wink: :lol:
 

Trinity man

Well-known member
What did they people put up for collateral? This is what gets banks in the trouble they are in today. They just loan money to anyone without checking on the back ground of these guys. I think its not just the people getting the loan that should be fined the bank need to be fined also. I mean 7.8 million dollars in loans with not a thing to show owner ship or checking on the owner ship of the cattle.

We had some cattle thief going on here in Texas a few years ago. When they caught the guy it was the grandson of one of best know Brahman breeders in Southeast Texas. I guess there is always a bad apple in every family. The cattle was Nolan Ryan's.
 

Buyer

Well-known member
I make a living order buying and ranching. I can't believe a bank or banks would loan this kind of money and not be on top of things. I don't think I would trust that feedlot owner very far either.
 

Blkbuckaroo

Well-known member
Oldtimer said:
Blkbuckaroo said:
Oldtimer said:
A few years ago my neighbor up the creek sold his calves..Since he had a lien on the brand- by law the buyer had to make out the check to him and the bank...He headed to the Bank- and I went to the waterhole to meet him and get my inspection fee and checkoff fee...

When he walked in he was flipping a silver dollar- said that after he paid off his operating note there wasn't anything left- so the banker felt so sorry for him he gave him the silver dollar so he could say he made a profit for the year :wink:
Talk about adding insult to injury :? At least he was able to pay his bills i guess.

Yep- and he said "Darn- the Banker renewed the operating loan so I can work another year for nothing"... :wink: :lol:
As long as you work for nothing,you'll always be employed :? :cry: :wink:
 

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