Rancher Sentenced for Fraudulent Cattle Numbers, Must Pay $2.1 Million

A federal investigation has resulted in a Montana rancher going to prison after he committed wire fraud when lying to a bank about cattle numbers on his ranches in multiple states.

On Aug. 27, Darrell Alan Hatley, 67, of Miles City, Mont., was sentenced for a single count of wire fraud by the U.S. District Court in Billings. He was sentenced to two years in prison and must repay the bank more than $2.1 million in restitution.

“I’ve seen quite a number of wire fraud cases come through here since I’ve been on the federal bench,” Judge Susan Watters said. “I have yet to have a case in front of me where I'm talking about more than $2 million in restitution.”

In 2002, Hartley began borrowing money from Texas-based Capital Farm Credit to cover expenses for his ranching operations in Oklahoma, Texas, Wyoming and other states. Starting in 2015, Hartley began to inflate the amount of cattle he was running on those properties. This violated a condition of his loan that required him to accurately report the herd numbers along with other ranch assets.

According to court documents, the loan totaled up to $8 million. As part of the loan agreement Hartley was to pay down the loan when cattle were sold.

Auditors from Capital Farm Credit attempted to schedule an inspection of Hartley’s cattle in July 2017. A month later the vice president of lending for Capital Farm Credit flew to the Wyoming ranch to inspect the cattle. It was at this time that Hartley told the representative of the loan agency his numbers would be off. He admitted that he had been “padding his numbers” since approximately October 2015.

Despite admitting to law enforcement officials about not having the correct herd counts for two years, he said the money from unreported sales was being reinvested. Hartley hoped the money could be used to pay back Capital Farm Credit “once the cattle market had recovered.”

Through this scheme Hartley allegedly gathered approximately $2.1 million from the fraudulent cattle numbers.

After sentencing Hartley apologized to those impacted by his crime. “I'm sorry for the embarrassment that I've caused my family and friends,” he said.

After reaching a plea deal, Hartley plead guilty to the wire fraud charge in April. As part of the plea agreement federal prosecutors selected a lower offense and he was required to pay restitution.