Maryland Cattle Brokers Plead Guilty To Defrauding The United States
Source: Department of Justice, U.S. Attorney’s Office, Middle District of Pennsylvania
November 18, 2021
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on November 2, 2021, Daniel Gutman and Benjamin Gutman, both age 39 and residents of Maryland, pleaded guilty to conspiracy to defraud the United States and commit offenses against the United States before United States District Court Judge Jennifer P. Wilson.
According to United States Attorney John C. Gurganus, the United States Department of Agriculture certifies that U.S. agricultural and food products shipped to international markets meet both U.S. and foreign requirements. When it comes to dairy cattle, this process relies upon the services of USDA-accredited veterinarians and the animal exporters to whom these veterinarians provide services. Federal law requires cattle transported in interstate and foreign commerce to be tested for certain diseases prior to shipment. These diseases may include, depending on the destination, Tuberculosis, Brucellosis, Leucosis, and Bovine Viral Diarrhea, among others.
The USDA initiated an investigation of Dr. Donald Yorlets, a USDA-accredited veterinarian, several years ago. Yorlets conducts business under the name Circle Y Veterinary Services, located in New Oxford, PA. On August 31, 2020, Yorlets pleaded guilty to a one-count criminal Information charging him with conspiracy to defraud the United States.
Daniel Gutman and Benjamin Gutman are brothers who own and operate a livestock exporting business known as Gutman Brothers Dairy Cattle (“Gutman Brothers”). Though the business is headquartered in Maryland, Gutman Brothers has a large cattle farm in Spring Grove, PA, in the Middle District of Pennsylvania.
Daniel Gutman and Benjamin Gutman are brokers of dairy cattle, both domestically and internationally. The use of false and fraudulent interstate and international health certificates—known, respectively, as Certificates of Veterinary Inspection (CVIs) and International Certificates of Veterinary Inspection (ICVIs)—allowed Gutman Brothers to acquire and quickly sell cattle from other dairy farms to customers in other states and foreign jurisdictions. In order to carry out their scheme, the Gutman Brothers needed a compliant USDA-accredited veterinarian to sign health certificates, knowing that the tests had not been apppropriately conducted. For years, Dr. Yorlets played this role.
The USDA’s investigation revealed that Yorlets and the Gutman Brothers conspired to carry out a scheme to defraud the USDA and the governments of Puerto Rico and foreign countries. They did so by submitting non-authentic, bovine blood samples for the detection of disease to a USDA-accredited testing laboratory located in Harrisburg, Pennsylvania and by issuing false and fraudulent health certificates for the untested animals. In addition, Yorlets also falsely claimed in health certificates that cattle had tested negative for Bovine Tuberculosis when, in fact, the required caudal skin fold test had not been administered. Furthermore, Yorlets submitted these false and fraudulent health certificates to a USDA Veterinary Services Endorsement Office. The USDA’s endorsement of these health certificates permitted dairy cattle to be shipped in interstate and foreign commerce.
Each cow has a unique antibody profile in its blood. If all of the blood specimens submitted by Yorlets were authentic, antibody profile testing would have shown that each blood sample had a unique antibody profile. Instead, forensic testing conducted on blood samples submitted by Yorlets for Gutman Brothers shipments confirmed that over a several year period, a small percentage of blood samples—only about one in ten—were authentic. These results showed that Yorlets repeatedly submitted the same blood for different cows and issued false health certificates for hundreds of animals that were never tested.
The fraudulent disease tests, and the false and fraudulent health certificates supported by these tests, enabled the Gutman Brothers to unlawfully export untested animals to Mexico, Canada, Qatar, and Puerto Rico. These false and fraudulent certificates were also transmitted, in turn, to customers of the Gutman Brothers, who needed these certificates in order to meet import requirements in their respective countries. For example, in April 2018, Gutman Brothers exported approximately 2,900 head of cattle to a buyer in Qatar. This buyer was unaware that it was receiving dairy cattle that had not been properly tested and that the international health certificates used for this sale were fraudulent. This buyer paid Gutman Brothers over $5.3 million in U.S. currency.
Daniel and Benjamin Gutman admitted as part of their guilty pleas that they were not only aware of Yorlets’ activities; at times they also took part in the process of obtaining blood samples, knowing that those samples would be used in a fraudulent manner. Gutman Brothers also admitted to providing ear tags for the identification of dairy cattle, knowing that the ear tags would be used to falsely represent that the cattle had been disease tested prior to shipment.
In connection with their guilty plea, Daniel and Benjamin Gutman have agreed to forfeit $1,438,646.42 in U.S. currency. They must also make full restitution to all victims for the losses those victims have suffered as a result of their conduct. The specific restitution amount will be determined by the Court following a hearing, and restitution payments will be made according to a schedule to be determined by the Court. The defendants have also agreed that any information in the Government’s possession can be shared with regulatory authorities for purposes of debarment proceedings.
The case was investigated by the United States Department of Agriculture and Homeland Security Investigations. Assistant U.S. Attorneys Ravi Romel Sharma and Philip J. Caraballo are prosecuting the case. Now retired Assistant U.S. Attorney Kim Douglas Daniel previously worked on the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for criminal conspiracy is 5 years’ imprisonment. This charge may also carry a fine and a term of supervised release following imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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