U.S. Attorney’s Office recovers nearly $850,000 for Montana dairy, other fraud victims

BILLINGS – The U.S. Attorney’s Office recently recovered $848,858 for victims of a fraud scheme that took place at a Bozeman dairy from 2007-2008, Acting U.S. Attorney Mark Steger Smith said today. In 2011, following an investigation by the IRS and FBI, Jeffrey Nicholas McCown, a manager with a Bozeman-based dairy cooperative, was convicted of wire fraud and conspiracy to commit wire fraud along with three other employees, Michael Ernest Monforton, the dairy’s CEO; Jeanette Sabrina McCown, its bookkeeper; and Scott Michael McCown, the shop manager. Jeffrey McCown was sentenced to three years in federal prison, followed by three years of supervised release. Jeffery McCown and Monforton were ordered by the court to pay $1.16 million in restitution. The recovery of the nearly $850,000 happened after the U.S. Attorney’s Office’s Financial Litigation Unit learned that Jeffery McCown was entitled to receive a substantial payout from the sale of a business and real property. The Unit garnished those funds and recovered $848,858.72 to pay McCown’s remaining restitution obligation in full. “Today's recovery marks a significant step toward restoring losses suffered by the victims of this fraud. This case demonstrates that even many years after a financial crime is committed, the pursuit of justice and restitution continues,” said Todd Wacaser, Acting Special Agent in Charge, IRS-CI Denver Field Office. “Those who misuse organizational funds should know that IRS Criminal Investigation remains committed to following the money, identifying assets, and working with our law enforcement partners to hold offenders accountable and recover funds whenever possible.” The fraud began in October 2007. At the time, Country Classic Dairy was a producer-owned co-op based in Bozeman and Jeffrey McCown, along with the other three, began using co-op funds for personal purchases and reimbursements (Country Classic merged with Seattle-based Darigold in 2010). McCown fraudulently used his co-op credit card to purchase and maintain personal assets like vehicles, trailers, boats, firearms, and an RV. He also took cash advances from co-op cards and accounts and recorded his purchases and transactions as business expenses to conceal the fraud. “Fraud does more than cause financial loss, it erodes trust,” said Special Agent in Charge Justin Gerken of the FBI Billings Field Office. “When individuals exploit positions of trust for personal gain, they harm not only the organization, but also the employees, customers, and communities that depend on it. The FBI remains committed to investigating these crimes and holding those responsible accountable.”