Man sentenced to five years in fraud case

Austin resident Rockland “Rock” McMahan was sentenced to five years in prison last week for conspiracy to make false statements to a production credit association in a scheme that defrauded more than 3,000 Texas farmers, ranchers and small business owners.

Around 2005, prosecutors said McMahan began fixing his books and lying on his balance sheets to hide losses and keep McMahan Order Buying afloat.

After the economy tanked in 2008, taking the cattle industry down with it, he defaulted on a $5.5 million loan.

McMahan had his accountant, Stephen Edwin Harper, fix his company’s books to extend an initial $2.5 million loan from Lone Star Production Credit, an association that operated as a cooperative and had been profitable since it was established in 1971.

McMahan also recorded fake cattle sales and accepted fraudulent funds from Eastern Livestock, a cattle brokering company based in New Albany, Ind.

When the economy collapsed, McMahan defaulted on his loan in March 2010 and fraud by both companies was exposed.

The Eastern Livestock scandal affected more than 700 ranchers across the country, who received a total of more than $130 million in bad checks from the company. McMahan’s scheme, prosecutors and Lone Star officials said, threatened the jobs and livelihoods of farmers and ranchers who borrowed from the credit union.

Harper was sentenced to two years in prison.

McMahan said Thursday he accepted responsibility for the actions that cost him his business and $5.3 million in restitution he will likely be paying for the rest of his life.

“I want you to know that I am beyond sorry for what I did,” he told Sparks. “What I did was selfish, irresponsible and just plain dumb.”