Cattle Buyer Indicted for Wire Fraud
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kenny thomas
Well-known member
I have it happen several times and I bet it happens more than we know. Someone at the sale barns were involved and should be charged also.
Jogeephus
Well-known member
kenny thomas":36bect29 said:
I agree. One person can't pull something like this off. It takes several and that is a conspiracy so all should be facing felony charges.
He's also a former President of the National Livestock Marketing Association
http://www.kwch.com/content/news/Feds-c ... 88951.html
http://www.kwch.com/content/news/Feds-c ... 88951.html
Jogeephus
Well-known member
TCRanch":2o5gkex2 said:
Why am I not surprised by this?
Jogeephus":32j1aeg5 said:
As of yet they haven't reported whether the employees will also face charges. He caused them to fax inflated invoices?
JMJ Farms
Well-known member
TCRanch":2zxnsfbu said:
Article stated he "caused" sale barns to issue inflated invoices and "had" his employees fax them. It's a good possibility that the employees weren't aware of the scam.
Son of Butch
Well-known member
It never mention how much he inflated the invoices or how it was done (price or weights) .... lazy reporting.
JMJ, the article/link I posted says: Prosecutors allege Patterson caused employees at his Anthony company to fax invoices to Five Rivers falsely inflating the amount paid for cattle.
Maybe everyone was "caused" to participate? Who knows? Black eye for the cattle industry :frowns:
Maybe everyone was "caused" to participate? Who knows? Black eye for the cattle industry :frowns:
JMJ Farms
Well-known member
TCRanch":uocji5bn said:
Ok I've got you now TC. I didn't see your link. I was quoting from the original link slick posted. That's why the mix up. I apologize. Odd that the word "caused" was used in both articles. My thought would be that the reporters got "caused" from a legal document or statement and that it has significant meaning in this case. Here's the excerpt from slicks link.
The indictment alleges Patterson caused sale barns to issue false invoices with inflated prices and had his employees to fax the inflated invoices to JBS Five Rivers.
I'm still not sure what "caused" means in this case. But my guess is that he "caused" them to unknowingly commit a crime. I don't think they will be charged. But I believe someone at the sale barn(s) will. Time will tell. Sorry again about the mix up.
JMJ Farms":9zrz34lb said:
Thanks. Two different articles will generally have at least some conflicting or missing information. I am interested to see how this plays out.
1. Anyone who will buy for 50 cents is a redflag. A good buyer will and should get a buck from JBS or anyone else. All our customers in our order buying business are charged a buck.
2. He's a dummy, I know that too.
3. If you want to order buy, you make the commission, if you can make something on freight and meds too, great. The cardinal rule is DO NOT markup cattle and a sale barn that tries to get you to collude withe them, you need to steer clear of.
4. While shenanigans with buyers can happen anywhere, that part of the world is where its most prevalent.
5. If you want to markup cattle (Lots of good people, including ourselves do, this isn't a secret), go put them together under your money, and mark them in purchased direct from you.
That one step sounds simple but it actually serves a purpose in keeping this sort of nonsense out of the industry.
Underfunded operators can't buy and trade so they strictly order buy. When they try to pull this, P&S will catch on. The barn gets greedy and agrees to remark the cattle and split the up. Instead of getting the doors shut at the barn, he takes the wrap. He will be deemed unfit for trade, and pay a fine. His company will reorganize as a different entity and he'll be right back rocking and rolling at the barn where he took the wrap and elsewhere. While certainly not common, it's an Oklahoma cowtrader angle from way back, just happened to occur in Kansas.
6. The key to being a buyer for a long time is transparency. For all the cow buyer jokes we all hear and tell, all of the best buyers are honest down to the last dollar and last head of beef. This is a shockingly small business. If I don't know of a guy, in 2-3 phone calls, I can know what he knows, what he doesn't, where he feeds cattle, who he's married to, if his money is good, if he's a slow pay, hard to ship to, etc. etc. etc.
7. If you want to be an order buyer, you can't be underfunded, there is always a hangup and one will always have to float more of their purchases for more days than they planned.
Our buying model is simple. If we order buy, we charge $1/cwt. plus the freight delivering the cattle, we operate on a very large volume with 3-4 trucking companies and can typically get the buyers cattle delivered under budget while still marking up the freight 10-25 cents/mile. We pay for the cattle and bill a delivered price to the buyer, including the barn or video invoice and a freight bill from us. We also charge a $20/semi load service charge for handling health certificates, brand inspection and any other needed paperwork.
We also often times put some cattle together that we believe will fit the needs of one or more of our buyers. The name of the game there is to get the cattle bought as economically as possible and turn them to the buyer with a markup closer to $5/cwt. If it doesn't look like that's realistic, we just order buy. If we are going to be out the cost of the cattle 1-2 weeks, that is more in line with what we want to be making, otherwise we are content to make the $1/cwt. plus freight markup and not tie up operating cash.
We do also buy a certain amount of breeding stock. We charge $25/head on cows and $100/head on bulls.
Buying isn't our primary business but has been a good way to diversify for a lot of years. We are small compared to lots of commission companies. We have a couple guys going to barns daily and buy cattle out of the country several days a week.
Our customer base is also small, on purpose. We prefer to buy for a small group of large, well funded ranches and feedlots and ourselves.
2. He's a dummy, I know that too.
3. If you want to order buy, you make the commission, if you can make something on freight and meds too, great. The cardinal rule is DO NOT markup cattle and a sale barn that tries to get you to collude withe them, you need to steer clear of.
4. While shenanigans with buyers can happen anywhere, that part of the world is where its most prevalent.
5. If you want to markup cattle (Lots of good people, including ourselves do, this isn't a secret), go put them together under your money, and mark them in purchased direct from you.
That one step sounds simple but it actually serves a purpose in keeping this sort of nonsense out of the industry.
Underfunded operators can't buy and trade so they strictly order buy. When they try to pull this, P&S will catch on. The barn gets greedy and agrees to remark the cattle and split the up. Instead of getting the doors shut at the barn, he takes the wrap. He will be deemed unfit for trade, and pay a fine. His company will reorganize as a different entity and he'll be right back rocking and rolling at the barn where he took the wrap and elsewhere. While certainly not common, it's an Oklahoma cowtrader angle from way back, just happened to occur in Kansas.
6. The key to being a buyer for a long time is transparency. For all the cow buyer jokes we all hear and tell, all of the best buyers are honest down to the last dollar and last head of beef. This is a shockingly small business. If I don't know of a guy, in 2-3 phone calls, I can know what he knows, what he doesn't, where he feeds cattle, who he's married to, if his money is good, if he's a slow pay, hard to ship to, etc. etc. etc.
7. If you want to be an order buyer, you can't be underfunded, there is always a hangup and one will always have to float more of their purchases for more days than they planned.
Our buying model is simple. If we order buy, we charge $1/cwt. plus the freight delivering the cattle, we operate on a very large volume with 3-4 trucking companies and can typically get the buyers cattle delivered under budget while still marking up the freight 10-25 cents/mile. We pay for the cattle and bill a delivered price to the buyer, including the barn or video invoice and a freight bill from us. We also charge a $20/semi load service charge for handling health certificates, brand inspection and any other needed paperwork.
We also often times put some cattle together that we believe will fit the needs of one or more of our buyers. The name of the game there is to get the cattle bought as economically as possible and turn them to the buyer with a markup closer to $5/cwt. If it doesn't look like that's realistic, we just order buy. If we are going to be out the cost of the cattle 1-2 weeks, that is more in line with what we want to be making, otherwise we are content to make the $1/cwt. plus freight markup and not tie up operating cash.
We do also buy a certain amount of breeding stock. We charge $25/head on cows and $100/head on bulls.
Buying isn't our primary business but has been a good way to diversify for a lot of years. We are small compared to lots of commission companies. We have a couple guys going to barns daily and buy cattle out of the country several days a week.
Our customer base is also small, on purpose. We prefer to buy for a small group of large, well funded ranches and feedlots and ourselves.
JMJ Farms
Well-known member
Good post js1234.
X2. Thanks for posting. I really didn't know it worked.JMJ Farms":1hwkxjm7 said:
melking
Well-known member
X3 I learned a lot.
midTN_Brangusman
Well-known member
js1234":29pl2bx6 said:
Thanks for posting very informative.
For a small time guy like myself finding an order buyer is hard to do.
I can't sit through sale every week and piss ant 10-12 home a week.
I've tried to buy a load load of ss heavy bred cows that have been put together from a buyer.
They either want to make 200 a head or mix in horned/painted/crippled/light bred cows they bought for .40 a pound.
I'd be good with 25.00 a head markup on a load of cows
25 x 40 = 1000 sounds fair to me
I'd take 10 a week for 4 weeks if that what it took
I can't sit through sale every week and piss ant 10-12 home a week.
I've tried to buy a load load of ss heavy bred cows that have been put together from a buyer.
They either want to make 200 a head or mix in horned/painted/crippled/light bred cows they bought for .40 a pound.
I'd be good with 25.00 a head markup on a load of cows
25 x 40 = 1000 sounds fair to me
I'd take 10 a week for 4 weeks if that what it took
$25/head seems to really be the resistance on order buying cows.Cross-7":1qrwd4a2 said:
I love to have my guys buy ss cows to repackage to stock cow buyers. Lot of times those cows can make $200/head just using the functions of geography and time. If a trader wants to make that sort of dollar amount per head, he needs to own the cows and assemble and trade.
The key to buying cows or yearlings or tennis shoes is pretty basic. Buy to the order.
The two best pieces of advice I've ever been given when it comes to order buying both came from the same man.
As it would happen, he has a Citation and a couple awful nice ranches that order buying paid for.
1. When someone orders a cheeseburger, don't bring them a ribeye and tell them that it costs more but it tastes better and conversely, when one orders a ribeye, they ought not to be served a cheeseburger and told that its cheaper so they'll like it better.
2. You're an order buyer not a ranch consultant. If the buyer wants to buy black 8wt.steers to feed and the sale has a better buy on 9wt. Char steers, don't try to switch his program. There is nothing wrong with and it is the buyers job to relay value in the market place that he sees but the job ends there. It's not for the order buyer to teach the customer how to do his business or even like what he's doing. We have a standing order for heiferettes, we don't pick up enough at any one sale, they typically cost too much in my view once we beat off the local rebreed crowd and the freight running short loads around chews up all the good in my view.
We have had this order for nearly 5 years now and the checks are on time and clear, obviously something is working for them that I'm missing, or it's not and this man wants to spend his children's inheritance a half a load a week of heiferettes at a time. It doesn't matter, he's happy and we are happy to service his needs.
melking":27pd4brp said:
Add my name to the list. Thanks
RanchMan90
Well-known member
http://www.cattlenetwork.com/news/indus ... ud-charges How about that?
