Sunday, December 18, 2005

Investment Scam Involves a Lot of Bull (and Cows)

The U.S. Attorney's Office for the Southern District of Texas announced the indictment of Lisa Smith for running a scam involving a purported "Genetic Research Program" on cattle that bilked investors of upwards of $5 million.  A press release by the USAO (here) described the scheme this way:

[B]eginning in January 2000 and continuing through November 2003, Ms. Smith told investors she was a post-graduate student at Texas A&M University working on a Doctorate in Cattle Reproduction. She allegedly claimed that a genetic program funded by a grant from Texas A&M University, the King Ranch and three other Texas ranches, had been in operation since 1997. Ms. Smith told investors that they could participate in the research program by purchasing cattle through her at $600 per head from the four ranches. Research on the cattle would take approximately nine months, after which the cattle would be sold back to the ranches by Texas A&M University at the price of $1,000 per head. The $400 difference in purchase and sale price was to be paid by the University’s grant program. Investors were promised this $400, less $100 retained by Ms. Smith for tax purposes, as a return on their investment. At that time, investors had the option to purchase additional cattle through her at the same amount of $600, effectively leaving their original investment in place, taking only the $300 profit or they could choose to "cash out" from the program, that is, receiving the $300 profit on each head and the invested principal ($600 per head). Investors signed contracts with Ms. Smith for the purchase of cattle. The United States mail or wire communications were used to send and receive letters and investment checks during the course of the scheme.

According to the indictment, Texas A&M University did not, in fact, sponsor a Genetic Research Program, the four Texas ranches, in fact, never sold any cattle to Ms. Smith for any purpose, and Ms. Smith was not enrolled in a Doctoral program at the University. It is alleged that Ms. Smith spent the investor’s funds for her personal benefit.

It just goes to show you that a claim of easy money from cattle can be a load of _______, even if the promised return is made by an Aggie. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/12/investment_scam.html

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» Did you hear about the Aggie who invested in the cattle research scam? from Houston's Clear Thinkers
It looks as if a number of wealthy Aggies have had an Aggie joke played on them. This Southern District of Texas U.S. Attorney's office press release (newspaper report here) reports that a Bryan woman has been indicted on mail... [Read More]

Tracked on Dec 19, 2005 3:37:58 AM

» Did you hear about the Aggie who invested in the cattle research scam? from Houston's Clear Thinkers
It looks as if a number of wealthy Aggies have had an Aggie joke played on them. This Southern District of Texas U.S. Attorney's office press release (newspaper report here) reports that a Bryan woman has been indicted on mail... [Read More]

Tracked on Dec 19, 2005 3:42:16 AM

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