Cyber Cattle Theft - Just a Click Away
That ranching opportunity you found on the internet may be nothing more than a thief with great web skills. A healthy dose of caution can keep your ranching operation from becoming a victim of online cattle scams.
By Larry Stalcup
Identity fraud is high on the list of crimes. Some creep hacks your credit card info, goes on a spending spree and fractures your finances. Some swindlers are taking it a step further in the cattle business through online rustling.
They’ll falsely advertise a prime set of VAC calves, bred heifers or a can’t-miss bull on a slick website, collect “earnest” money and then slither away to their next target.
“Internet rustling” can come in many forms, says Larry Gray, executive director of Law Enforcement and Theft Prevention Services for the Texas and Southwestern Cattle Raisers Association (TSCRA) in Fort Worth. And it’s just another area of unlawful activity that he and 30 TSCRA special rangers must monitor across Texas and Oklahoma.
Many of the approximately 18,000 Cattle Raisers members belong to the association partly because they can take advantage of theft prevention services offered by TSCRA. Special rangers investigate about 1,000 cattle theft and ag crime cases every year. More than $5 million in stolen cattle and ranch assets are recovered annually.
Special rangers are commissioned through the Texas Department of Public Safety and/or the Oklahoma State Bureau of Investigation. Those rangers stationed along the Texas-Oklahoma border are dually commissioned to investigate agricultural crime in both states.
They investigate thefts of cattle, horses, saddles, trailers, equipment and even poaching. They also pursue white-collar criminals who commit agricultural fraud and inspect livestock to determine ownership and prevent theft after a natural disaster such as a wildfire, flood or hurricane. When strays slip out the gate, rangers help determine their ownership. And they educate landowners on how to prevent theft and throttle the plans of thieves.
YouTube thievery
Unfortunately, along with a bandit backing his trailer up to a remote pasture to steal a few steers in the middle of the night, theft of cattle through internet fraud is a growing concern. They’ll hack you, not deliver cattle you buy online or sell you stolen cattle without a brand.
“Special rangers are investigating more and more of these types of online thefts involving not only cattle but all types of equipment,” Gray explains. “There are many reputable online video cattle auctions that are used every week by legitimate sellers and buyers. Unfortunately, there are unscrupulous and dishonest individuals who use the internet to deceive cattle producers, either by misrepresenting the quality of the cattle they have for sale or posting cattle for sale that don’t exist.”
Gray says a typical situation involves someone posting a video of cattle for sale that he or she doesn’t own. “When a prospective buyer responds and makes a deal, the crook will require that the buyer wire transfer a percentage of the purchase price as earnest money to secure the sale,” he says. “The thief then says he’ll collect the rest of the funds upon delivery of the cattle. But after the earnest money is submitted, the honest purchaser never hears from the seller again.
“Sometimes cattle are actually sold and delivered, but they aren’t the same quality that has been represented by a posting online. The online posting may advertise the cattle as 4- or 5-year-old, heavy-bred cows. But when the buyer receives them, they are old, smooth-mouth, open cows. By then, the crook is long gone.”
A similar situation may involve a producer answering an ad in a livestock publication. An attractive, 4-color ad may illustrate the best looking, most proven bull with excellent expected progeny differences (EPDs). But once the so-called seller receives all or part of the payment, he may already be using another alias in another state before the buyer even figures out he’s the victim of a dishonest deal.
Get references
With the ease of access to virtually anything in the world on your smartphone, tablet or computer, there are any number of scams that may cost producers a lot more than so-called “fake news” that pops up on social media and even the biggest media outlets.
Gray emphasizes that online theft, and from a print media ad or other phony deal, can usually be prevented if proper references are verified.
“By all means, ask for references of other ranchers or individuals who have bought cattle from an individual, then follow-up on the references given,” he says. “Use the internet to your advantage and Google the individual or company’s name. See if they have a Facebook account. If so, what have they posted on it?”
TSCRA Special Ranger Wayne Goodman, who works out of Godley, observes a lot of internet crime. “While you are checking the references of an individual or company, also contact the special ranger in your district to see if he’s heard of them,” Goodman recommends. “If the entity is from out of state, special rangers have contacts in almost every cattle-producing state and the Canadian provinces, whom they can call upon and check their reputation.”
Here are some of their other recommendations for identifying a reputable seller or buyer:
- Ask if the party is licensed and bonded by the Grain Inspection and Packers and Stockyards Administration, which is a division of USDA. “If they are a dealer or order buyer, they are required to be licensed and bonded by GIPSA,” Gray says. “Their license and bond can be verified at gipsa.usda.gov.”
- Ask for the physical address of their place of business, as well as contact phone numbers, so they can be easily verified online.
- Ask for a copy of cattle health papers, including pregnancy tests from a veterinarian if you are purchasing cows that are represented as bred.
- Go online to see if the party is registered as an LLC or corporation with the secretary of state in that respective state.
- Again, ask to whom they have sold cattle in the past, preferably in your area; people you might know as well.
- Ask about third-party verification by an individual, company or organization to identify whether a seller or buyer is legit. “Also, payment received or made by PayPal or another online paying service is another way to verify the validity of one party or another,” Goodman says.
Joe Lichtie, vice president of Superior Livestock Auction, says cattle buyers or sellers using the internet for marketing cattle should investigate all facets of a potential transaction. Video and/or internet auctions like Superior take many steps to assure that a deal is above board.
At Superior, for example, when cattle are consigned, a Superior rep goes to the producer’s farm or ranch to film the cattle. He prepares a consignment contract, which describes the cattle and states the terms and conditions of the sale. The description, current location, delivery date, weighing conditions, vaccination programs and other information are gathered and compiled into a video auction catalog that is made available to potential buyers and on the internet.
“After the cattle are sold, a contract is written stating the terms and conditions of the sale,” Lichtie says. “It is sent to both the buyer and seller. Following the auction, an auction rep contacts all parties to arrange the delivery. At delivery, an auction rep is present to oversee the sorting and loading of the cattle and to make sure the terms of the contract are followed.”
You can guarantee that a major auction or commission company’s officials will do all they can to confirm ownership of cattle.
TSCRA special rangers often monitor sales to observe brands. “When tracking down stolen cattle, including those stolen on the web, nothing makes the law enforcement officer’s job easier than having a proper brand on the cattle,” Gray says.
“Law enforcement is required to positively ID stolen property back to its rightful owner. Without a permanent brand, this is very difficult and makes recovering the cattle and filing a criminal case very difficult, if not almost impossible.”
Ag data security needed
In February 2015, the U.S. Homeland Security Newswire reported that America’s farms and agricultural giants are not exempt from cyber attacks. Citing information presented at a USDA farm-outlook forum, the newswire stated that as farmers and agribusinesses rely more on data, the farming sector is increasingly vulnerable to cyber attacks. That’s due in part to satellite-guided tractors and algorithm-driven planting services expanding across the U.S. Farm Belt.
Additionally, the newswire noted that for industrial farmers and livestock producers, “data breaches and manipulation are especially worrisome, considering that many rely on new farm management services that collect information on soil content and past crop yields to generate planting recommendations.”
Good cyber security and proper internet commerce are essential in today’s cattle production and marketing. And it’s up to producers themselves to verify whether that strong EPD bull or elite set of bred heifers is for real before transferring payment.
Don’t just count on a handshake — and don’t be a victim of internet rustling. ❚
“Cyber Cattle Theft” is excerpted from the March 2017 issue of The Cattleman magazine.