A former Saskatchewan feedlot operator has pleaded guilty to defrauding four cattle co-operatives, the provincial government and two banks of slightly more than $1 million.
Brian McNary entered his plea in the Regina Court of Queen’s Bench July 8 and will be sentenced Sept. 8.
The case stems from a complaint that Saskatchewan Agriculture filed with the RCMP in January 2000, shortly after provincial livestock inspectors shut down a Rocanville, Sask., feedlot that McNary operated.
Inspectors determined 1,750 cattle belonging to 40 members of four Moosomin area co-ops were missing. The co-ops involved were Valley Livestock Co-operative Ltd., Prosperity Cattle Co-operative Ltd., Hilltop Beef Production Co-operative Ltd. and Cutarm Valley Cattle Co-operative Ltd.
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Loan balances for the missing cattle totalled $1.01 million. RCMP investigators later determined many of the missing cattle existed only on paper.
Mark Folk, manager of livestock financing programs with Saskatchewan Agriculture, said the province is out $587,000, the amount it had to compensate producers participating in the Livestock Loan Guarantee Program.
Two banks and the co-ops picked up the remainder of the shortfall.
“This was obviously a pretty big blow to our program,” Folk said.
“Since this incident has happened we have implemented a random audit procedure, which includes all feedlots in our program. We audit feedlots at least once a year to verify numbers: what they’re supposed to have there versus contracts.”
About 4,000 producers are eligible for loans this year, down from the 6,000 who participated in the program in 2000.
Folk said the Rocanville incident and other earlier fraud cases “definitely scared off a few members” from participating in the provincial program, but the decline is also related to the impact of BSE and the downsizing of the farm population.
He said the program has loyal customers, and changes that have been made have significantly reduced the chance of future fraud.
A pre-sentence report is being prepared, which will provide the judge with McNary’s work history and family background.
McNary’s lawyer has requested the court explore the possibility of a conditional sentence served in the community.
The crown prosecutor wasn’t available for comment, and Folk didn’t know what type of sentence he was seeking. Shayne Hartwell, a constable with the Yorkton RCMP detachment, which investigated the crime, didn’t know either.
“It will be considerable though, given the amount of money involved,” he said.
The maximum sentence for fraud is 14 years in prison, but it could be a fine or probation.
An earlier fraud case involving Diamond T Feeders in Delisle, Sask., resulted in a 1995 sentence of 22 months in a provincial correctional centre for feedlot operator Leroy Traynor.
Folk said it is highly unlikely that any of the parties involved will receive financial restitution from McNary because he has declared personal bankruptcy.
