Feedlot Ponzi scheme lands South Dakota man 7-plus years in federal prison
Robert Blom was sentenced to serve his time in a prison as close to South Dakota as possible, in an effort to be close to family
SIOUX FALLS, S.D. — Feedlot Ponzi schemer Robert Blom was sentenced Thursday, Nov. 5, at the U.S. District Courthouse in Sioux Falls, after the court heard over two hours of testimony from friend and foe.
Blom, 59, of Corsica, was sentenced to 97 months in prison — with six months subtracted for time served — plus three years of supervised release after pleading guilty in August to one count of federal wire fraud and one count of money laundering.
Blom’s sentence stems from a federal indictment in March 2020, which detailed about $10 million in funds related to his operation of a custom cattle-feeding business. Court documents say he altered purchasing documents to conceal his business operations, leading investors to believe his feedlot was more successful than it actually was and allowing him to sell the same group of cattle to multiple buyers.
"Bob should never see the light of freedom again — those are hard words coming from a friend. You’ve destroyed the trustworthiness of a man’s word. "
- Jeff Hampton, victim
A civil foreclosure case in Douglas County that was opened in 2019 involving the banks and the individuals that were victims of Blom’s remains ongoing. More than 70 parties have been listed claiming that Blom owed them money. First Dakota National Bank said Blom had overdrawn his bank account by more than $1 million and owes the bank more than $6 million.
In total, Blom scammed $24 million from 30 victims over a course of five years — including one victim who lost over $3.75 million.
Friends, victims address the court
Thursday’s sentencing saw heartwarming testimony from Blom’s friends speaking to his character and heart- wrenching testimony from his victims speaking to the multigenerational damage Blom is responsible for.
The defense, seeking a lesser sentence, argued that Blom’s struggles with mental health made him feel that he was solely responsible for keeping his family farm alive.
“Some people farm out of obligation to their families, often running century-old farms where they’re the third, fourth or fifth generation,” said Blom’s attorney, Sioux Falls Assistant Federal Public Defender Amanda Kippley. “(Blom) tried to protect his family farm and his investors.”
Kippley, while referring to the scam as a Ponzi scheme, argued that Blom’s scam was based on pride.
“A lot of these schemes blossom from greed,” Kippley said. “This was formed out of pride.”
Blom’s employer, where he’s been working since he was released from custody after his indictment, told the court all of his employees think “very highly” of Blom, despite being “hard nuts to crack.” Other friends and co-workers of Blom spoke to his character, mostly citing his work ethic and ability to create personal connections.
Blom’s victims took to the stand next.
“Being a victim, I’ve heard a lot in the courtroom about how Bob felt. What about how I felt?” Rob Meyer, a victim who had worked with Blom for 14 years, asked the judge before addressing Blom. “That was a grand scheme, Bob. You ain’t felt the grief you caused. You think you know. You don’t know.”
Meyer asked the judge to impose the maximum sentence of 40 years in prison, saying justice will not have been served without it.
Jeff Hampton, a friend of Blom’s for over 50 years, also addressed the court regarding his losses.
“Bob should never see the light of freedom again — those are hard words coming from a friend,” Hampton said, before turning to Blom. “You’ve destroyed the trustworthiness of a man’s word.”
William Taylor, an attorney representing a victim in Blom’s civil case, told the court his clients want one thing — a sworn deposition.
“We want to take Mr. Blom’s deposition,” Taylor said. “The problem is, the person with the answers to one-third of the questions in this case has made himself unavailable.”
Taylor requested the court add an order to Blom’s sentence that would require him to give a sworn deposition.
A total of six victims gave their testimony to the court.
“I’ve hurt so many people, including family and friends. I’ve lost a lot of trust from these people — I’m a heartbroken man,” Blom said in the only time he elected to speak. “I’d do anything if I could give back to these people. I want to help people.”
Blom apologized, accepted responsibility and told the court he begs for mercy in his sentence.
Assistant U.S. Attorney Ann Hoffman, who was prosecuting the case, reiterated the idea that Blom was a well-liked man who was trusted in the community and among his clients, but harped on the fact that other farmers can get through financial hardships without committing fraud.
“We know the cattle business can be stressful, but a lot of people can make it without fraud. A lot of these folks who were victims in this case are dealing with these same stressors,” prosecutors said. “Some of them don’t know if they can pass down their family farm to the next generation — there may not be a family farm to pass down.”
Scheme was lie after lie, judge says
Before handing down Blom’s sentence, U.S. District Judge Karen Schreier gave her opinion on the case.
“I grew up on a farm. My dad always said your word is your honor,” Schreier began. “You lied to (the victims) repeatedly. You put all the people who invested in you in danger of losing their family farms.”
Schreier acknowledged that Blom’s scam put the futures of farm owners — and even their descendants — at risk.
“You lied to the banks and you lied to the IRS. This scheme was just one lie after another lie after another lie,” Schreier said, before calling out Blom’s prior conviction for theft by insufficient funds. “The sentence you received allowed you to do this scheme again, because you didn’t learn your lesson.”
Schreier issued a lighter sentence than victims had hoped. In addition to 91 months in the custody of the Federal Bureau of Prisons and three years of supervised release, she ordered Blom to cooperate in DNA collection and prohibited him from opening future credit lines without approval from government entities. She also ordered Blom to not commit any federal, state or local crimes, to notify a district attorney of any address changes and to distribute any unexpected financial gains to the victims.
She also ordered that Blom be lodged in a federal prison as close to South Dakota as possible, and that he be made available before transport to prison to give a deposition to Taylor.
Blom was remanded into the custody of the United States Marshals Service.