SALEM, Ohio — Columbus-based United Producers Inc. must pay a $96,000 fine to cut their ties to what the FBI called the largest cattle fraud case in U.S. history.
The fine, handed down June 1, is the result of a consent decision between the USDA’s Grain Inspection, Packers and Stockyards Administration and United Producers.
United Producers CEO Dennis Bolling calls the fine “the remnants of the George Young debacle” and the final chapter of the saga that’s dragged on since 2001.
United Producers and its credit corporation became involved in the nationwide scam when they bought into a limited liability corporation owned by George Young and Kathleen McConnell.
Young and McConnell were convicted in 1995 of bilking ranchers out of more than $160 million in investments by saying they were buying and selling cattle for Producers clients.
At the time the duo were discovered in 2001, falsified records showed they had 344,000 head of cattle on hand when, in reality, less than 17,000 head of cattle existed.
They had created a Ponzi scheme, paying off early investors with money from later investors and buying few cattle in between.
After the fraud was exposed, United Producers declared Chapter 11 bankruptcy. Dennis Bolling said that financial reorganization is complete.
After an investigation, GIPSA alleged United Producers created false or misleading records for the purpose of providing short-term financing to the credit corporation, which was in the business of purchasing, managing and selling cattle for investors.
GIPSA officials also said United Producers documented fictitious cattle purchases and sales and engaged in deceptive business practices in which purchasers of cattle were unable to locate the animals.
Order. The order, issued June 1, 2007, tells United Producers to cease and desist from creating false or misleading records.
UPI is also ordered to keep accounts and records that fully disclose all of the transactions involved in its livestock dealings.
Specifically, the order says UPI must keep true and correct copies of invoices and records pertaining to all cattle purchases, sales and financing arrangements.
United Producers CEO Dennis Bolling said the $96,000 fine was the estimated margin on transactions George Young did for Producers.
Bolling also said the company provided for that fine in its financial planning and that it “was not a shock to our system.”
Bolling said the fines have nothing to do with current operations of United Producers.
United Producers operates 20 weekly auctions and 21 buying stations in six states. The company also works in direct marketing of livestock, financing, and livestock risk management options.
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