It appears to have been a busy week for the U.S. Attorney’s Office in Montana after authorities said two separately charged men admitted to a Bureau of Land Management cattle grazing scheme out of Billings and a bank defrauding scheme out of Lewistown.
So how does one defraud the BLM?
According to the Montana District’s U.S. attorney, a Billings man accused of defrauding the Bureau of Land Management of fees in a cattle grazing scheme, admitted to a mail fraud crime.
Gene John Klamert, 70, pleaded guilty to mail fraud. As a result, Klamert faces a maximum of 20 years in prison, a $250,000 fine, and three years of supervised release.
The government alleged in court documents that between 2017 and 2020, Klamert held a BLM grazing permit that allowed him to graze his cattle on public land called the Two Crow allotment near Winnett.
The permit authorized Klamert to graze cattle he owned for a low monthly base rate, which the BLM charged for each head of cattle. To graze cattle owned by any third party, the permit required Klamert to pay the base rate plus a higher surcharge per head of cattle.
From May 2018 to May 2020, as part of Klamert’s reported use of public land, he submitted a fraudulent bill of sale to the BLM stating that he had purchased cattle from an individual, identified as John Doe, when in fact, Klamert knew that no actual sale occurred.
As a result, Klamert avoided paying the surcharge fees that he owed to the BLM. To accomplish the scheme, the government alleged that Klamert instructed John Doe to sign a bill of sale, stating that he was selling his cattle to Klamert, when in fact, John Doe had only contracted with Klamert to graze his cattle on the BLM allotment. At Klamert’s direction, John Doe mailed the fraudulent bill of sale to Klamert, who signed and sent it to the BLM to report what cattle he was grazing on the public land.
The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is set for May 25. Klamert was released pending further proceedings.
Fergus Credit Union allegedly lost $1 million
Another news release from the U.S. Attorney’s Office in Montana alleges that a Montana man from Lewistown has admitted to defrauding a bank and a credit union after obtaining more than $1 million in loans for his cattle ranching business.
Eric Edward Mack, 43, pleaded guilty in August 2022 to bank fraud and was sentenced on Jan. 25 to time served, followed by five years of supervised release, with one year of home confinement, according to U.S. Attorney Jesse Laslovich.
The government alleged in court documents that from November 2015 to January 2018, Mack applied for and received multiple operating loans from Garfield County Bank and from the Fergus Federal Credit Union for his cattle ranching business.
At the Garfield bank, Mack had loans totaling approximately $885,000 from 2015 to 2017, and at the Fergus Credit Union, Mack had loans totaling approximately $250,000 from 2016 to 2018. Mack secured loans at both businesses with items, including cattle belonging to him. The government further alleged that Mack sold cattle secured by loans at Garfield and Fergus and failed to pay the proceeds of the sale to either bank. Mack also engaged in improper conduct when obtaining the loans by misrepresenting the status of collateral used to secure the loans at each institution.
The U.S. Attorney’s Office prosecuted the case, which was investigated by the FBI. The court will determine restitution at a later hearing.