Exeter man sentenced to 32 months for $2 million fraud scheme

A former Butterfield Feed Mill employee was sentenced to 32 months in prison during a hearing today at U. S. District Court in Springfield.

Jeffrey Hobbs, 41, Exeter, will be on supervised release for three years following his sentence and will have until the last six months of that time to make $2,334,180.51 restitution, according to court records.

The fraud scheme was laid out in the grand jury indictment:

When a delivery truck would arrive at the feed mill, the defendant was  responsible for weighing each truck and its content.  Once the truck was weighed, the defendant would create a scale ticket for the company that delivered the grain, corn or feed. 

Once the ticket was issue by the defendant, a copy of the scale ticket would be sent to Cargill’s headquarters in Minneapolis, Minnesota for processing and payment to the trucking company.  Upon receiving the scale ticket, Cargill would issue an electronic transfer of funds from Cargill’s bank account to the bank account of the delivery trucking company that transported the gain, corn or feed, as set out on the scale ticket.  This electronic transfer of funds would travel through interstate commerce from the headquarters of Cargill to the banking institutions of the trucking company located in their respective state.

 

The Scheme 

Beginning in 2002, the defendant was approached by several individuals  about creating fictitious scale tickets for non-delivered loads of corn as a way to make money and ultimately defraud the owner of the feed mill.

   

In approximately 2003, the defendant began creating completely fictitious scale tickets for several individuals for the delivery of loads of grain, corn or feed that did not truly exist. 

In order to create the fictitious scale tickets, the defendant would store the empty weight of a truck in the scale memory system, and then use the gross or full weight of another truck to create a scale ticket for a non-existent or “ghost load” for these individuals. The last fictitious scale ticket was issued on September 25, 2012, said date being approximate.

 

Initially, the defendant received $300 in cash for each “ghost load.”  Eventually,  the defendant was paid $500 in cash for each “ghost load.” 

Once the defendant created the fictitious scale ticket for the “ghost load,” a copy  of the ticket was given to the driver, a copy of the ticket was kept at the local feed mill, and the third copy was sent to the Cargill headquarters in Minneapolis, Minnesota.

 

At various times, from at least as early as February 2003, through September 25, 2012, during the defendant’s tenure an employee at Butterfield, Missouri feed mill, the defendant knowingly executed a scheme to defraud Cargill to obtain money from Cargill by means of false and fraudulent pretenses, representations and promises

. 

On numerous occasions, over the span of over 9 years, while employed initially  with Willowbook and then with Cargill, the owners of the Butterfield, Missouri feed mill, the defendant caused the interstate transmission of electronic transfer of monies from the bank accounts of both Willowbrook and Cargill for the payment of “ghost load” shipments to the accounts of the individuals for whom her created “ghost loads,” and others, based on the defendant creation of fictitious scale tickets for the delivery of “ghost loads” of non-existent 

grain, corn or feed.