In Texas, cattle rustling evolves into sophisticated multimillion-dollar crimes – By Brandon Mulder (Dallas Morning News) / May 12 2019
John Bradshaw clocks 40,000 miles a year in his white Ford F-150, driving up and down the highways and country roads that crisscross Texas’ North Central Plains. Bradshaw is in the cattle business, but not in the traditional sense.
He’s deputized to protect ranchers from the West’s timeworn villain: the cattle rustler.
Bradshaw is 49, gregarious, and wears the stereotypical accoutrements of a cattle cop: a white felt cowboy hat, a holstered .45 with a glossy wooden grip, and a gleaming gold badge above his breast pocket denoting his special occupation — special ranger with the Texas and Southwestern Cattle Raisers Association, the agency deputized by the state to investigate cattle crimes in Texas and Oklahoma.
In the past decade, the association’s 30 special rangers have recovered more than $48 million worth of livestock and equipment. Oftentimes the rustlers’ takings are small; a handful of cows, horses or bulls that disappear under the cover of night can yield a few thousand dollars.
But in recent years, Bradshaw and his colleagues have noted a shift in the rustling vocation.
Far from their gun-slinging origins, today’s rustlers mount complex financial scams that reap millions of dollars from banks and businesses — and they’ve been doing it in plain sight.
Bradshaw has worked some standout cases, like his 16-month investigation of Howard Hinkle, whom he described as a trusted and likable Wichita Falls tax accountant. In the eyes of First United Bank in Sanger, Hinkle was a major rancher with 7,800 head — worth between $7 million and $8 million — scattered across land leases in 10 Texas and Oklahoma counties.
Like many rural independent banks, First United Bank was in the business of financing cattle loans. So when the 67-year-old Hinkle needed cash, according to the TSCRA, he signed a security agreement with the bank that pledged his herd as collateral in exchange for $5.8 million in loans. He showed bank officers what the state said was fraudulent documentation and “cattle that belonged to other individuals,” the cattle raisers association said.
“He’d drive up to a place like right there and say, ‘Yep, those are my cattle,'” Bradshaw said, motioning toward a field of grazing steer.
In 2017, the bank contacted Bradshaw and told him Hinkle had defaulted on loan payments. Bradshaw said Hinkle was savvy enough in the accounting field to know how far a bank would go — or wouldn’t go — to verify ownership.
“Their jaw dropped when they realized there [were] no cattle whatsoever,” Bradshaw said.
Hinkle was indicted by a Denton County grand jury on a first-degree felony theft charge in June, and he’s scheduled to appear in court this month. His lawyer, Robert Estrada of Wichita Falls, did not return multiple requests for comment.
*Special ranger John Bradshaw of the Texas and Southwestern Cattle Raisers Association walks out of the Wise County Courthouse after turning in paperwork on a cattle rustling case in Decatur. (Vernon Bryant/Staff Photographer)
Phantom cattle company
On a crisp morning last fall, Bradshaw drove his pickup from his home in Decatur across the grassy Red River Valley and into Waurika, Okla., just 4 miles from the Texas border. On auction days, the Waurika sale barn buzzes like a stock exchange trading floor.
But on the day of Bradshaw’s visit, the barn sat quiet. He poked around the venue, chatting with the staff, and reviewed sale logs. He was searching for signs of 10 head of cattle that had recently vanished from a North Texas ranch and was hoping rustlers might have pawned their takings at a sale barn across the state line.
The case before him that day was the bread-and-butter of what special rangers historically investigated. But today’s rustlers are no longer simply the “cowboys who had drifted into dubious practices,” as the Texas State Historical Association described them.
And no case exemplifies that better than Bradshaw’s long pursuit of one of the most daring fraudsters in his career.
Tony Lyon was a deceptively charming agent, as Bradshaw described him, working for Nebraska-based cattle brokerage company Midwestern Cattle Marketing from his hometown of Perrin, about 50 miles northwest of Fort Worth. Bradshaw said Lyon would get paid on commission, buying cattle from Texas sale barns on behalf of the brokerage company and shipping them to customers nationwide.
In 2014, Lyon told Midwestern Cattle Marketing that he met a deep-pocketed cattle buyer from Fort Worth, John George, who led a consortium of wealthy businessmen called the George Cattle Co., according to federal court records. In order to keep pace with the amount of business Lyon was doing with George, Midwestern Cattle Marketing sent Lyon a company checkbook and gave him full rein of its bank account, court records show. Within six months, Bradshaw said, Lyon had bought and sold $90 million in cattle.
Investigators discovered that John George and his namesake cattle company were fabrications — cornerstones to a complex check-kiting scheme. The scheme collapsed in 2015 when a $5 million check made out to the brokerage company bounced, court records show.
Midwestern Cattle Marketing president Jason O’Connell drove through the night from Nebraska to confront Lyon. In O’Connell’s court testimony in 2017, he recalled Lyon telling him, “there were no cattle, there was no George Cattle Co., and there was no money to turn over,” according to a Texas Lawbook account of the trial.
The damage had been done to Midwestern Cattle Co. A year later, it went out of business.
In March 2017, Lyon was sentenced to 10 years in federal prison for wire fraud. Between the federal criminal case and a separate civil lawsuit, he was ordered to pay $28 million in restitution, making it what TSCRA considers one of the largest cattle fraud cases in Texas history.
*Wise County sheriff investigator Luke Campbell hands over DVD copies of evidence to special ranger John Bradshaw of the Texas and Southwestern Cattle Raisers Association. (Vernon Bryant/Staff Photographer)
Why more cases?
The list of cases in recent years goes on and on.
Decatur resident Jimmy Wayne Parker was arrested in February 2018, accused of lying to Seymour Interbank about cattle he had put up as collateral for a loan. In April, Altus, Okla., resident Marty Maahs was arrested on embezzlement charges related to a $1 million loan in which he also put up cattle as collateral. In September, Hillsboro resident Willie Rittenbaugh was arrested on suspicion of financial crimes that purloined 511 cows and calves.
All three men have been indicted and are awaiting hearings or a trial.
David Anderson, an agricultural economist whose research at Texas A&M University focuses on livestock and food products, attributes the rise in white-collar cattle thieving to the state’s recent drought, when unforgiving skies scorched Texas pastureland between 2011 and 2014.
Ranchers were forced to sell their herds, and cattle prices plummeted. When rains returned, so did demand. Cattle prices rebounded to record highs in 2015, nearly doubling 2011’s prices. Many ranchers who wanted to restock their herds took out loans to buy cattle at inflated prices.
By 2016, the market stabilized and prices returned to the mean. Ranchers were left paying off loans valued much higher than the cattle their loans bought. Some ranchers defaulted. Banks called in the cattle rangers when they suspected borrowers were hindering the seizure of collateral.
The effect of these cases is a hesitancy among some independent banks to continue giving cattle loans, Anderson said. Some banks have increased requirements, such as requiring more collateral; others are backing out of cattle lending altogether, according to the TSCRA and the Independent Bankers Association of Texas.
“I think there is a legitimate concern about the availability of capital, about the ability to borrow,” Anderson said. “I think that makes it more difficult.”
In addition to white-collar rustlers, Bradshaw said he is tasked with rounding up small-time rustlers — men who are often caught in cycles of drug use or are simply stealing one or two steers to make rent.
The ebb and flow of rustling also hinges on the state of the oil fields. When oil prices are high and drilling companies are hiring, small-time rustlers often work as oilfield roughnecks, Bradshaw said. During a bust, rounds of layoffs send folks back home, and rustling cases tick up again.
*Agricultural sales in Texas average about $20 billion annually, with cattle making up $10.5 billion of that. (Texas Department of Agriculture.)
The well-known difficulties of ranching continue to accumulate. The accelerating unpredictability of weather patterns has turned ranching into a gambling game; livelihoods remain subject to the vagaries of the cattle market; land prices and production costs inflate continuously; disease always lurks; and, now, more obstacles are sometimes set in place to obtain cattle loans.
The layers of hindrances are perhaps a reason why the frontier experience appears to be edging toward obsolescence — the average age of Texas ranchers is close to 60.
Thousands of ranchers across the state together will produce 27 billion pounds of Texas beef this year, Anderson said. With narrow profit margins — the average size of a Texas rancher’s herd is just 34 — “they’re squeaking by,” Bradshaw said. “One thing can damage them or cause them to have a loss for that year.”
It’s Bradshaw’s duty, he explains, to not let that be a rustler.
