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Ohio Co-op Must Pay in Record Fraud Case

A federal jury has ruled an Ohio farm cooperative must repay a group of Nebraska families $15 million lost in what the FBI has said was the biggest cattle fraud case in U.S. history.

Jurors found Monday that United Producers Inc. of Columbus breached contracts with the families, converted the money to its own use and did not uphold its financial duty to the families.

The families actually lost more than $50 million in the scheme carried out by Missouri cattle buyers already convicted in the case, said David Domina, an attorney for the Nebraska families. Cattle buyers George Young and Kathleen McConnell defrauded investors by using their money to pay off business debts instead of buying cattle, authorities said.

The lawsuit involved $15 million in checks that the families wrote to United Producers during a four-month period in 2001. Later that year, Young and McConnell's business collapsed. Instead of buying cattle with the investors' money, they had used it to pay off other investors and to pay bills.

The cooperative did not defraud the families, Domina argued after a five-day trial, but accepted the $15 million in checks knowing that the money was supposed to be used to buy cattle. When the cattle were not bought, he said, the cooperative was responsible.

Thomas Hamill, an attorney representing United Producers, had argued that the cooperative had made a loan to another corporation that Young and McConnell operated, but which was 75 percent owned by the cooperative.

The checks written to United Producers were to repay the loan, not to buy cattle, Hamill said.

Federal District Judge Lyle E. Strom delayed completion of the case pending a ruling on several motions. The amount of money involved in the case was not in dispute, Strom said. The money will go to members of and businesses owned by the Eggerling family of northeast Nebraska, the Curry family of southeast Nebraska and Loren and Mary Eckert of Pilger, Neb. Hamill has said the cooperative would consider an appeal if the jury ruled against it.

Categories: Fraud

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