A Fraudster in a Haystack

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It’s pretty hard to find a needle in a haystack, and the prospects of finding a fraudster in a haystack are just as daunting. (Criminals tend to hide behind their illegal activities and can be pretty tough to locate.? An article published by the Daily Iowegian tells the story of a father and son who allegedly defrauded farmers across 10 states of more than $860,000 through bad hay. (They purportedly hid behind false claims about their hay bales and failed to deliver what they promised.)

The story reports that a federal grand jury handed down an indictment charging the two men from Missouri with one count of conspiracy, seven counts of wire fraud and seven counts of mail fraud. (The charges are related to fraudulent practices regarding the sale and shipment of hay, as well as cattle.)

The father and son duo allegedly advertised good quality hay over an online public forum for classified ads, on Internet websites and through newspapers and contracted with farmers either verbally or in writing to provide and deliver high quality hay. However, over a two-year period of time they allegedly either did not deliver or provided poor quality hay bales. (They also supposedly jacked up the prices for hauling the bales to the purchasers by charging more per bale than originally agreed upon.)

The article states that the men allegedly collected more than $3.2 million from the sale of bad hay that included weeds, sticks, bushes, small trees, briars, thistles, mold and Conservation Reserve Program hay. (The Conservation Reserve Program, which is run by the Department of Agriculture, pays an annual fee to farmers who remove environmentally sensitive land from agricultural production and plant other vegetation that will improve the quality of the environment by reducing soil erosion, improve water quality and increase wildlife habitat, while reducing damaged caused by natural disasters such as floods.)

Supposedly, 58 individuals lost more than $600,000 from the purchase of the bad hay. (One unlucky individual in New Mexico paid $195,000 for 3,000 bales, but only received 90 more than three weeks late with an upcharge for the delivery.)

In addition to the charges related to bad hay, the father and son farmers also are suspected of misrepresenting the age and quality of 389 cows. (They purportedly received nearly $60,000 in fraudulent funds by selling the cattle at an inflated price.)

The 50-year-old father and his 28-year-old son purportedly conducted business over the phone and via email and texts and entered into contracts either verbally or in writing. Authorities say they required the sellers to pay in advance and when purchasers requested a refund for the poor hay or did not receive a full shipment, they did not issue any money back. (Supposedly, they also owe the two hauling companies who delivered the bad goods nearly $58,000.)

The indictment handed down by the federal grand jury contains a forfeiture allegation that would require the father and son defendants to forfeit property obtained as a result of the alleged violations. (This includes a money judgment of more than $860,000.)Source: Today’s ”Fraud of the Day” is based on an article titled, ”Father, Son Indicted with $862K in Farm Fraud,” published by the Daily Iowegian on June 11, 2015.

UNIONVILLE, Mo. — A 15-count indictment was handed down by a federal grand jury on Tuesday, alleging a father and son pair defrauded farmers of nearly $862,000 in 10 states while working from Putnam County.

Mark A. Henry Sr., 50, of Cameron, Missouri, and Mark A. Henry Jr., 28, of Lucerne, Missouri, were both charged with one count of conspiracy, seven counts of wire fraud and seven counts of mail fraud.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.