Corsica Man Indicted for Fraud and Money Laundering in Multi-Million-Dollar Cattle Ponzi Scheme

United States Attorney Ron Parsons announced that a Corsica, South Dakota, man has been indicted by a federal grand jury for nine counts of Wire Fraud, six counts of Mail Fraud, and seventeen counts of Money Laundering.

Robert Blom, age 58, was indicted on March 3, 2020.  He appeared before U.S. Magistrate Judge Veronica L. Duffy on March 16, 2020, and pleaded not guilty to the Indictment.

The maximum penalty upon conviction is up to 20 years in federal prison, and/or a $250,000 fine for wire fraud and $500,000 fine for money laundering, 3 years of supervised release, and up to $3,200 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that beginning on or about January 2014 and continuing through February 2019, Blom devised a scheme to defraud investors.

Blom operated a custom cattle-feeding business in the Corsica area.  As part of his business, Blom solicited investors for groups of cattle.  He purchased groups of cattle from various livestock companies and the cattle were raised on feedlots owned or used by him.  Blom raised the cattle to maturity and then sold them to processing plants.  After the groups of cattle were sold, Blom paid the profits to the investors in the groups.

It is alleged, however, that Blom sold the same groups of cattle to multiple different investors.  Each invoice should have been used for just one group of investors, but Blom knew that he did not have and could not purchase as many head of cattle as he represented to investors.  Sometimes Blom altered the cattle purchase invoices in an effort to conceal that he sold the same group of cattle to multiple different investors.

Also as part of the scheme and artifice, Blom falsely and fraudulently represented to investors that he would use their money to purchase groups of cattle and to care for those cattle.  Instead, he routinely used money from new investors to pay back old investors.

On multiple occasions, Blom mailed invoices and other investment-related documents to investors and several investors mailed their investment payments to him.  Also on multiple occasions, Blom received payments from investors, often by check and Blom also paid old investors, often by check.

The estimated loss amount at this time is approximately $20 million.

The charges are merely accusations and Blom is presumed innocent until and unless proven guilty.

The investigation is being conducted by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, and the U.S. Attorney’s Office.  Assistance has also been provided by the South Dakota Division of Criminal Investigation, South Dakota Attorney General’s Office, Douglas County States Attorney, Douglas County Sheriff, South Dakota Brand Board, North Dakota Brand Board, and the Montana Brand Board.  Assistant U.S. Attorney Ann M. Hoffman is prosecuting the case.  

Blom was released on bond pending trial.  A trial date has not been set.