A month after Seth Nichols was led out of a federal courtroom in handcuffs, both his parents now are accused of stealing $1.6 million worth of cattle from a Marana family, as well as retaliating against them.

Nichols, 29, pleaded guilty to a multi-million dollar bank fraud while working as the office manager of the Marana Stockyards and Livestock Market, owned by Clay Parsons and his family. While Nichols serves a five-year prison sentence and pays back $3 million in restitution, his parents now face 11 felony counts for their alleged role in the theft, according to an updated indictment filed Jan. 23 in U.S. District Court in Tucson.

The fraud unfolded over four years and destroyed the longtime friendship between the Nichols family and the Parsons, who Seth Nichols told a federal judge treated him “like a son.” At an emotional sentencing hearing in late December, six members of the Parsons family described dealing with their betrayal by a “wolf in sheep’s clothing,” sleepless nights worrying about the future of the stockyard and baseless accusations from Seth Nichols and some Marana residents that the Parsons were to blame for the theft.

Seth Nichols admitted to using the stockyard’s funds and line of credit to buy cattle for his family’s brokerage company, which sold the cattle without paying back the stockyard. He then falsified financial records to make it appear as though his family’s company had paid the stockyard for the cattle, according to his plea agreement.

A federal grand jury indicted Seth’s father, Donald Hugh Nichols, on charges of bank fraud and conspiracy to commit bank fraud in August. With the Jan. 23 updated indictment, he and his wife, Jane Ann Nichols, both were charged with those crimes, as well as wire fraud, accused of stealing $1.6 million worth of livestock and retaliating against the victim of the theft.

The retaliation charge stems from a meeting between the Nichols and the Parsons days after the theft was discovered in August 2017. At that meeting, the Nichols signed over their house and another property in Pinal County, which combined were worth more than $1 million, to the Parsons.

In February, Seth Nichols pleaded guilty to federal bank fraud, including the fraudulent sale of more than $1.3 million worth of cattle to the Nichols’ cattle company. A week later, the Parsons sued his parents in state court, alleging the theft benefited the Nichols’ company.

In June, Donald Hugh and Jane Ann Nichols filed a lis pendens, or legal notice that ownership of the Pinal County properties was in dispute. They claimed the Parsons lied to them at the August 2017 meeting and asked a Pima County Superior Court judge to reverse the transfer of the properties.

In August, Seth Nichols asked a federal judge to let him back out of his plea agreement. One of the reasons he gave for his request was that he would not have pleaded guilty had he known his plea would be used by the Parsons to sue his parents.

The day after Seth Nichols’ request, his parents filed for bankruptcy, all but ensuring the Pinal County properties could not be sold as federal bankruptcy proceedings unfolded.

The proceeds from selling the Pinal County properties would have helped the Parsons weather the “Category 5 financial hurricane” caused by Seth Nichols’ theft, federal prosecutor Michael Jette wrote in a Dec. 13 sentencing memorandum in Seth Nichols’ case.

In his memorandum, Jette cited an email sent to him by Donald Hugh Nichols’ attorney saying if the Parsons dropped their lawsuit, the notices on the properties and Seth Nichols’ request to withdraw his guilty plea would be rescinded.

The “attempt to create an advantage” continued to harm the Parsons, frustrated the sale of one of the properties, and “in the worst optic, was meant to interfere with an ongoing criminal investigation,” Jette wrote.

In the Jan. 23 federal grand jury indictment, Donald Hugh and Jane Ann Nichols were accused of filing a “fraudulent Lis Pendens” on the properties in an effort to harm the Parsons and their stockyard.

The criminal retaliation charge is “going over the line,” said Stephen Portell, the defense attorney representing Jane Ann Nichols.

Rather than a vindictive act, the notices on the properties were filed after their attorney at the time advised them to do so, Portell said.

With regard to the other charges, Jane Nichols is “as much a victim as anybody in this case” and “never participated in any crime,” Portell said. “It’s an awful thing to contemplate that the child you raised could do things to put you in jeopardy,” Portell said.

Meanwhile, the Parsons family, which has run the stockyard since the early 1990s, is trying to keep the business afloat.

At the December sentencing hearing, Parsons family members said they struggled to pay for the debts left by the theft, the day-to-day costs of running the stockyard, legal fees and accounting fees to untangle the mess Seth Nichols had left in the stockyard’s financial records.

One family member quit her job and moved back to Marana to help with the stockyard’s accounting. After decades of work, Clay and Karen Parsons no longer see a way to retire as they try to get out of the financial “hole” Seth Nichols dug for them.

Donald Hugh and Jane Ann Nichols are scheduled to be arraigned Feb. 8; their trial is tentatively scheduled to start Feb. 26.

Contact reporter Curt Prendergast at 573-4224 or cprendergast@tucson.com or on Twitter @CurtTucsonStar