March 15, 2019
By Dominic J Bartolone
Contributing Editor, Fraud Friday
Fraud Friday — Missouri Rancher Indicted in Million Dollar Ponzi Scheme
A self-proclaimed cattle buyer from Clinton, Missouri has been sentenced to eight years in federal prison and ordered to pay more than $3.2 million in restitution for his part in hatching a cattle-buying Ponzi scheme.
Cameron J. Hager, 43, was sentenced by U.S. District Judge Gary A. Fenner on March 5 to prison without the possibility of parole, after pleading guilty to one count of wire fraud and one count of money laundering. Hager was also ordered to pay $3,236,547 to the victims of his crimes.
Hager’s scheme included defrauding 92 investors out of $4.7 million for a proposed “cattle fund” where he claimed he would buy cattle at a discount, fatten them up, and sell them for a significant profit.
Hager operated 5A Holdings, LLC, where he admitted to engaging in the scheme that continued from July 2015 to September 2017. He convinced his victims that he was locating herds of cattle that he could buy far below market price. He would then use the investor capital to purchase the herds and move them to pastures on property owned by his company, where the cattle would be cared for, fattened, and eventually sold to slaughterhouses with which he claimed to have “contacts.”
Court documents show he never actually purchased or sold any cattle.
Federal prosecutors say that the victims invested between $1000 to $267,000 each, with Hager using the money for personal items and also to repay early investors once the Ponzi scheme began to unravel. The total loss to investors amounted to $3,236,547.
Hager promised investors a net return ranging from between 23 to 28 percent on their investment. However, payments were only made to some early investors in an effort to recruit more victims for the fund.
Instead of purchasing cattle Hager used the money he raised to buy a Ford F-150 truck, a Toyota 4Runner, and two Winnebago travel trailers. He also deposited nearly $400,000 into his business bank account. Prosecutors say that the money from that transfer was used to purchase the automobiles, leading to the money laundering charge.
He also used some money to make mortgage payments on his 46.6-acre residential property, which was listed for sale at $899,000 shortly before his guilty plea.
As part of the scam, Hager employed a fake “seasoned veterinarian” whom he claimed would examine the cattle and approve the purchases. Robert D. Hawkins admitted in April 2017 to portraying a veterinarian for Hager’s scheme and was ordered by the court to pay $20,000 into the Investor Education and Protection Fund.
Hager’s scam began to fall apart when some investors filed a complaint with the Missouri Secretary of State’s Securities Division, which subsequently opened a fraud investigation. In a letter penned to the Securities Division, Hager admitted to never buying the cattle and making false representations to investors.