KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Braymer, Mo., man was sentenced in federal court today for a cattle fraud scheme that resulted in losses of more than $262,000 to his victims.
Garland Joseph “Joey” Nelson, 22, of Braymer, was sentenced by U.S. District Judge Howard F. Sachs to two years in federal prison without parole. The court also ordered Nelson to pay $262,450 in restitution to his victims, including the USDA Farm Service Agency, Cyclone Cattle Company and individual victims. The government may enforce restitution and the recovery of government property under lien at any time. Nelson must report to the Bureau of Prisons on Nov. 21, 2016, to begin serving his sentence.
On Nov. 30, 2015, Nelson pleaded guilty to a fraud scheme using property mortgaged or pledged to farm credit agencies. Nelson engaged in a three-part fraud scheme that caused a combined loss of $262,450.
Loan Fraud: $138,452
Nelson admitted that he engaged in a scheme to sell at least 114 mortgaged head of cattle that were pledged to the Farm Service Agency (FSA), without notifying FSA of the sales, from April 1, 2013, through June 2014. He did not instruct purchasers to address proceeds checks to the FSA as well as to him, and he did not remit the bulk of the sale proceeds to FSA, as was required by the terms of his loans. Instead, Nelson admitted that he kept the funds for his personal use.
Nelson received two livestock operating loans in April 2013 totaling $158,000 for the limited purpose of buying and raising cattle. In violation of the express terms of his loans, and with fraudulent intent, Nelson conducted livestock sales from April 2013 to July 2014 under the name “Joey Nelson” to avoid detection. He conducted other sales in the name of a friend to further conceal his involvement. His friend then transferred the proceeds to Nelson.
Nelson ceased making repayments on his FSA loans as of Jan. 12, 2015. His outstanding principal balance is $138,452, plus applicable interest and penalties. Nelson filed for Chapter 7 bankruptcy on June 25, 2015.
Livestock Sales: $124,000
Nelson also schemed to remove identification from cattle that was owned by others but placed in his care to graze. Nelson removed identification tags from 646 head of cattle that belonged to others, and commingled these cattle with his own and with those owned by his neighbor and landlord, in order to sell livestock undetected. He sold those cattle for his own benefit, for a total loss to three victims of $124,000.
This case was prosecuted by Special Litigation Counsel Gregg R. Coonrod. It was investigated by the U.S. Department of Agriculture, Office of Inspector General.