DENVER, Colo. (PRESS RELEASE) – The United States Attorney’s Office for the District of Colorado announces that Richard K. Sears, 73, of Pueblo was sentenced to serve 41 months in prison for his role in a cattle investment fraud scheme. After his term of incarceration, Sears will serve 3 years of supervised release. In addition, Sears must pay restitution of $4,969,384.35.
According to information contained in court documents, beginning in June 2008, and continuing into May 2015, Sears defrauded investors through a cattle investment program to develop a breed of cattle – Rocky Mountain Romangus – that did not then exist. For a set “entry fee,” Sears claimed he would purchase a specific number of cows for the investor’s benefit. Sears claimed he would then “leaseback” the cattle for a set period of time and be responsible for paying all costs related to the cattle. Sears further agreed to pay the investors an annual “cash return” or “leaseback payment” of 10 percent and to repurchase the cows for no less than the original purchase price at the end of the lease period.
Initially, Sears made some leaseback payments, thereby lulling investors into believing the investment was successful and operating consistent with their agreements. In 2011, Sears stopped purchasing cattle, yet continued to solicit new investors. At the same time, he misrepresented the true number of cows in his possession. By September 2013, Sears knew he was unable to meet his obligations but he continued to solicit investors, obtaining over $800,000 from the later investors. Sears used a portion of investor funds to pay personal debts unrelated to the cattle program.
“Creative fraudsters may go to great lengths to hide their crimes, but we are going to uncover them,” said United States Attorney Cole Finegan. “Dedicated experts in this office and our law enforcement partners use painstaking means to stop complicated fraudulent schemes and bring fraudsters to justice.”
“This complex case required thousands of hours of investigation by U.S. Postal Inspectors and other investigative staff,” said Ruth Mendonça, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service. “This sentence makes every minute spent unraveling this scam worthwhile. We are proud of the combined efforts of our partners at the Internal Revenue Service – Criminal Investigation and the United States Attorney’s Office who assisted Postal Inspectors in bringing justice to Mr. Sears’ victims,” said Mendonça.
“This complex investment fraud case highlights the unique investigative skills that IRS Criminal Investigation brings to federal prosecutions,” said Andy Tsui, IRS Criminal Investigation Special Agent in Charge, Denver Field Office. “This sentence and restitution order are a step towards righting the wrongs perpetrated upon the victims of Sears’ fraudulent scheme.”
U.S. District Court Judge Robert E. Blackburn pronounced the sentence on December 9, 2021.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the United States Postal Inspection Service.
This case was prosecuted by Assistant United States Attorney Tim Neff.
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