Cattle rustling scheme sends Bozeman man to prison

MISSOULA – A Bozeman man accused in a cattle rustling scheme of stealing cattle and embryos while defrauding a bank and a business partner was sentenced today for conviction in the case to 30 months in prison, followed by three years of supervised release and was ordered to pay $450,993 restitution, Acting U.S. Attorney Leif M. Johnson said.

Joshua James Chappa, 45, pleaded guilty on Jan. 21 to conversion of secured property and to wire fraud.

U.S. District Judge Dana L. Christensen presided. Judge Christensen allowed Chappa to self-report to prison.

In court documents filed in the case, the government alleged that Chappa was a ranch manager and worked for Hayes Ranch, LLC, in Wilsall, from 2008 until 2017. Chappa also formed Cold Smoke Cattle, LLC, in 2015. While working for Hayes Ranch, Chappa had access to the cattle, embryos and other items. When the owners were out of the country, Chappa began dealing in cattle, including stealing cattle from the Hayes Ranch and selling them as if they were his own.

The government alleged that in 2015, Chappa signed two security agreements with Northwest Farm Credit Services, PCA, which is a member of the Farm Credit System. Chappa pledged his cattle as collateral. Between 2015 and 2017, Chappa intended to defraud Northwest by selling cattle in which Northwest had a security interest without remitting the proceeds as promised. Chappa defaulted on the loan and Northwest suffered a loss.

The government further alleged that Chappa partnered with Willers Mitten Brand, in Norfolk, Nebraska, in various cattle ventures and failed to remit payment to Willers Mitten Brand when selling the cattle. In a cattle sale at Billings Livestock Commission in January 2017, Chappa requested that payment of $41,262 be made to his company, Cold Smoke Cattle, saying that Willers Mitten Brand had “already signed the brand release for that to happen.”  When questioned by Willers Mitten Brand about the payment, Chappa deceived it, ensured he received the full amount and failed to split the proceeds.

The government alleged that between 2015 and 2017, Chappa stole cattle and embryos, and sold cattle in which Northwest Farm Credit Services had a security interest, resulting in a total loss of approximately $481,805.

Assistant U.S. Attorney Ryan G. Weldon prosecuted the case, which was investigated by the FBI and the Montana Department of Livestock.

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