C. Oregon hay scammer gets 26-month sentence

Good-quality hay is a lifeblood for horse-lovers, farmers and ranchers across the High Desert and elsewhere. And the Internet is a lifeline for those seeking to buy or sell anything – including hay. But the ever-present dark side of the Web – scams – led to a more than two-year investigation and court case that finally came to a conclusion on Friday the 13 th , in a Prineville courtroom.

That’s when Mark Franklin Broeg, 57, was sentenced by Crook County Circuit Judge Gary Williams to 26 months in prison. Broeg also was ordered to pay nearly $40,000 worth of restitution and $12,000 in investigative costs, dating back to when District Attorney Daina Vitolins first learned what he was up to.

The sentence was imposed more than three months after a jury found the Portland-area man guilty of racketeering – operating a criminal enterprise, in this case “Red Barn Hay Company,” complete with a Facebook photo of a red barn that actually belongs to a Kansas couple who owns property in Deschutes County, Vitolins said Sunday.

Vitolins said it quickly became clear that Broeg was exploiting the strong reputation of Central Oregon hay in two directions – buying hay without paying for it, then advertising and selling thousands of dollars of hay without delivering it.

“Victim after victim – California, Arizona, New Mexico,” she said, because many horse owners around the West say, “‘We love the Central Oregon hay – it’s wonderful for horses.’ He took advantage of that.”

She called Broeg’s conviction “a significant victory for our office, in that we used criminal acts from around the state and California to prosecute him, which is allowed under (Oregon’s) racketeering statute.

It doesn’t take much digging at all on Google or the like to find folks like one anonymous blogger who created a “Where is my hay?” blog last year, saying he or she had wired $3,720 to Broeg’s Wells Fargo bank account for 240 bales of orchard grass hay at $15 per bale, plus a $120 delivery charge. There had been no hay — nor a refund — by the following April, despite many requests.

Similar posts abound on scam sites like “ripoffreport.com” — and the trail gets darker farther back, due to an early 1990s federal securities fraud conviction of Broeg, resulting in a five-year prison sentence and an order to repay over $1.2 million in restitution to more than 100 victims — money that Vitolins said was never paid.

In that case, she said, “he’d get people to do notes on properties that were completely over-inflated – a horrible scheme.”

After getting out of prison, Vitolins said, Broeg about a decade ago took over a horse training and boarding facility near Portland, then started the Red Barn Hay Company.

Broeg actually was booked into the Crook County Jail last May on an arrest warrant out of Clackamas County of failure to appear in court, on a case involving his failure to pay child support.

Vitolins said the hay case began nearly three years ago, when her then-deputy DA, Vicki Schwartz, “came to me and talked to me about this guy” who was ripping off folks by selling “Central Oregon hay” on craigslist and “anywhere he could try to get interest,” mostly from victims in California.

“One of the things he insisted was on being paid for all of the hay ahead of time,” the DA said. “One victim said, ‘We probably knew better,’ but the agricultural horse industry is pretty trusting – and they love our Central Oregon hay.”

There were essentially only two victims that led to charges in Crook County, and Vitolins said she didn’t want to prosecute a theft case that would bring little if any penalty. So after learning of how widespread the scam had been, she decided to charge racketeering, so that all of the misconduct, in Oregon and California, could be part of the case.

Last fall, when the trial took place just after Labor Day, 10 victims traveled hundreds of miles to Prineville – on their own dime – to testify against the hay scammer who had betrayed their trust.

“One said she had to sell a horse, because she deposited $3,000 with Broeg and he never delivered,” Vitolins said.

Broeg took the stand in his own defense, Vitolins recalled, painting a tale of woe and circumstances beyond his control, but also “extremely arrogant. He said once money was deposited in his account, it was his – he could do what he wanted with it. It was just a smooth, slick con man.”

Broeg said the customers weren’t patient, but Vitolins said, “You can’t wait six months or a year for hay – your animals need to eat. He had one excuse after another – his son was sick, it was the holidays, there were trucking delivery issues.”

The trial began the day after Labor Day, and the jury got the case that Friday evening, reaching its verdict in less than four hours – guilty of racketeering, but also, to Vitolins’ puzzlement, not guilty on the local theft charges. (She figures it possibly could have something to do with how one victim, Jim Puckett, told the jury it was his “own damn fault” for trusting Broeg.)

Judge Williams noted in a judgment filed last Wednesday that Timothy Gassner of Madras was Broeg’s court-appointed attorney, as he’d determined Broeg was “indigent” and unable to pay for representation. (We have reached out to Gassner for any comment on the sentence, or any word if an appeal is planned.)

Vitolins said the sentencing occurred about three months after Broeg’s conviction because Gassner “wanted more time, wanted to find some people who did business” with Broeg and would speak better on his behalf.

Broeg’s whole defense, the DA said, was that he “just ran into bad luck – ‘I didn’t mean to rip these people off.'” In fact, she said, Broeg claimed it was “because folks on the Net had said bad things about (him), it ruined his business.” (The judge at sentencing told Broeg his blame of the victims was “very misplaced,” Vitolins recalled.)

“He’s a con man – very personable, if you don’t know his background,” she said. “He just got nasty when people said, ‘Come on, give me my hay or my money back.'”

In fact, Vitolins said, Broeg didn’t just portray himself as an aggrieved victim – “he tried to sue some of the victims in Clackamas County – they all were dismissed – and he was suing the first attorney who represented him.”

The initial Crook County theft indictment came in March 2011, but Vitolins said they had trouble finding Broeg, assisted by Clackamas County investigators and federal marshals, eventually found living at the Comfort Suites in Clackamas. The “address” for Red Barn was a rented mailbox in Clackamas County, she said.

At his first arraignment, Vitolins said they asked that Broeg not be allowed to use the company or the Internet any more, but Judge Annette Hillman declined to do so – “so he made at least three more victims after being charged.”

In fact, calls Broeg made from jail after his arrest came up in the trial, Vitolins said. “He’s in custody, and (is told) ‘so and so wants their money because, because they haven’t gotten their hay,’ and he says, ‘Oh – whatever.'”

The DA said Gassner tried to get Schwartz taken off the case, claiming she was somehow tied to postings online, urging victims to call the DA’s office – but Vitolins said her office had nothing to do with those. She also offered post-sentencing praise for the investigating officers, Travis Jurgens and Theresa Plinski, for the time they put in on the case.

Those folks with the red barn in the photo Broeg used? They sold him $8,000 worth of hay, but he “didn’t pay a dime,” Vitolins said. “He was portraying himself as a Central Oregon” resident, she said, when actually “he lived all over the place.”

When a case arose in California of a victim who bought hay from Broeg, officials there considered it a civil matter, not a criminal one, Vitolins said. “We took it on from the consistent pattern and practice” of scamming, she said. “I felt it was hurting Central Oregon agriculture, and he had to be stopped – somebody had to say, ‘No more.'”

In a letter to the judge before sentencing, victim Jolly Martin of Anza, Calif., said, “It is my strong hope this time Mr. Broeg receives a harsh enough sentence to make a lasting impression on him.”

“Because of the nature of his interstate fraud, the court may never know the extent of his crimes,” Martin wrote.

“Some victims lost something harder to replace than money,” Martin added. “They lost hope, promise and opportunity. … I sometimes think of the victim who testified at the trial that she had to sell one of her best horses to pay for feed to replace the hay she brought from Mr. Broeg but never received.”

The DA’s office had sought nearly twice as long a sentence – 50 months – but the judge did tack on several conditions to the three years of post-prison supervision, including the fairly obvious order that Broeg “not engage in fraudulent business activities,” also ordering him to dissolve the Red Barn Hay Co., not contact his victims and “not engage in any internet business transaction as a seller of merchandise or provider of any service,” including “any hay sales.”

With Broeg still sitting in the Crook County Jail, awaiting his trip to state prison, the lesson to others buying hay, online or off, (or anything else, for that matter) is clear, to the prosecutor: “You never pay for anything in full, unless you actually know the person and have done business with them before.”

“Do some kind of transaction you can put a hold on,” Vitolins said. “Put it in escrow — not released until you get the hay.”