After stealing from a prominent Marana cattle stockyard for four years, a longtime friend of the stockyard’s owners was sentenced Tuesday to five years in federal prison and ordered to pay $3 million in restitution.
Seth Nichols, 29, was accused of doctoring financial records at the Marana Stockyards and Livestock Market while working as the office manager, often sitting next to the victims of his fraud who he said in court had treated him “like a son.” Nichols pleaded guilty in February to federal bank fraud in U.S. District Court in Tucson.
At Tuesday’s hearing, six members of Marana’s Parsons family, which has owned the stockyard for more than 25 years, described the impact of Nichols’ betrayal to Judge Cindy K. Jorgenson. She then sentenced Nichols to the maximum prison term allowed under his plea agreement.
Nichols “completely took advantage” of his relationship with the Parsons and abused their trust, Jorgenson said.
“This, to me, was clearly an elaborate scheme” to steal from the Parsons, Jorgenson said, noting Nichols “didn’t stop this behavior until he was caught.”
Nichols was caught in August 2017 when the Parsons family discovered the stockyard’s bank accounts were missing $1.3 million. The stockyard’s line of credit, which is used to quickly settle accounts at weekly cattle auctions, was drawn down inexplicably by nearly $2 million, as the Arizona Daily Star reported Sept. 2.
Fraudulent bank records implicated Nichols, who Clay Parsons, co-owner of the stockyard and a well-known rodeo cowboy, had hired in June 2013 to run the stockyard’s day-to-day business. Nichols admitted to using his position to exploit the stockyard’s transaction system at the auctions, according to the plea agreement.
Nichols manipulated the stockyard’s line of credit to buy cattle at the auctions on behalf of the Nichols Cattle Co., which then sold the cattle elsewhere without reimbursing the stockyard. Nichols also admitted to sending stockyard funds directly to his family’s company.
He covered up the fraud by faking wire payments and financial records to make Parsons and his bankers believe the stockyard had plenty of cash and a full line of credit, according to the plea agreement.
‘That’s just the way it is, Clay’
When it came time for Clay Parsons to speak to Jorgenson at Tuesday’s hearing, he placed his cowboy hat in front of him, gripped the sides of the podium and lowered his head.
As about 50 of his family’s supporters and 10 members of the Nichols family waited, he paused and then raised his head to address Jorgenson.
“I never would have believed he would have done this to us,” Clay said of Nichols.
“I’m a cattleman. I do things on trust. I’ve never been a wheeler-dealer. I just worked hard.”
After nearly wrecking their business, Nichols had shown no remorse and instead forced the Parsons family to “play defense,” Parsons said.
For more than a year, his family had been subjected to “hearsay” in Marana, Parsons said. “I’ve heard it’s just a big mess. That it’s a misunderstanding. I’ve heard that it’s my fault.”
The rumor that he was to blame for the fraud was “the most terrible statement I’ve ever heard,” Parsons said.
The last time Parsons spoke with Nichols was in August 2017, shortly after Parsons’ children, who worked at the stockyards, found checks Nichols had written to his family’s cattle company using funds from the stockyards, Parsons said.
Parsons called Nichols’ father, Donald Hugh Nichols, who was indicted in August in connection with the fraud, and asked about the checks. The elder Nichols passed the phone to Seth, Parsons said.
“The last thing I heard from Seth was, ‘That’s just the way it is, Clay’ and hung up,” Parsons told Jorgenson.
“I would have done anything for them,” Parsons said in a raised voice.
With regard to the stolen money, “we don’t know where it went,” Parsons said to Jorgenson.
“But you can deliver justice,” he said. “And justice, for me, your honor, is significant prison time.”
Jorgenson said some of the money was spent on a “very lavish lifestyle” that included partial ownership of a helicopter and “gambling trips to Las Vegas.”
That lifestyle stood out to Karen Parsons, who said she and her husband, Clay, sometimes wondered how the Nichols’ did it.
“We couldn’t afford what they afforded,” Karen Parsons told Jorgenson.
As it turned out, the Nichols’ lifestyle was “false,” she said.
Nichols twisted the family’s longstanding friendship to “gain access to all our weaknesses,” she said, such as her and Clay’s lack of understanding of the internet and office technology.
The stockyards’ finances are in ruins and she had to borrow money, including from friends and relatives, she said.
“Next year, everything we make will have to go to pay people back just to stay in business,” she said.
“We have no retirement anymore,” Karen Parsons said. “We have a hole. He dug a hole for us.”
Nichols apologized to the Parsons family and told Jorgenson the fraud happened because he was “overwhelmed” while working at the stockyards.
“I did wrong to the Parsons and their business,” Nichols said.
He said he has learned from his experiences and lamented the loss of his friendship with the Parsons, particularly Clay Buck Parsons, son of Clay and Karen Parsons.
“I wish we could still have a friendship, but I also understand it’s not possible,” Nichols said.
Federal prosecutor Michael Jette cast doubt on the sincerity of Nichols’ remorse, including a legal claim filed in Pima County Superior Court against properties the Nichols’ had agreed to turn over to the Parsons.
“He juked and ducked and obfuscated about what he did,” Jette said, noting Nichols had the “audacity” to say in court documents that “his family was being treated badly.”
At the end of Tuesday’s hearing, Nichols was led out of the courtroom in handcuffs by U.S. marshals.
His father, Donald Hugh Nichols, was indicted in August on bank fraud charges in connection with $1.6 million of allegedly fraudulent cattle sales at the stockyard’s auctions.
His trial in federal court in Tucson is scheduled to start in late February.