Phantom cows spark $350m Uruguay scam

Gulf Today

19-05-2025

Sandra Palleiro is on the hunt for her lost cows. The 60-year-old accountant is standing in a muddy field at the end of a farm track in Uruguay's remote border region with Brazil.
She has travelled 600 kilometres (370 miles) from the capital, Montevideo, to find 61 cattle she owns, at least on paper. The missing bovines were part of a "cow bond" scheme that has collapsed, causing one of Uruguay's biggest ever financial scandals.
The co-owner of one Uruguayan firm that took money from savers to invest in cows has died by suicide. Three companies have gone bust and are under investigation for fraud. "Hello moo-moo! Could one of you be mine?" Palleiro called out hopefully into a paddock in the border region of Artigas, her jeans caked in mud as she approached a wire fence to get a closer look at the cows.
Palleiro – like hundreds of other investors – is unable to find the animals she owns or prove they even exist, making them part of a herd of "phantom cows" that could number over 700,000 head of cattle. So far, the losses have mounted to some $350 million, roiling the stable farming nation, home to just 3.4 million people – but 12 million cows.
It has also sent shockwaves through bigger ranching neighbours Argentina and Brazil, which looked to Uruguay's cattle-tracking system as a model and where similar livestock investment schemes operate.
In March 2024, Palleiro put her life savings of over $50,000 into the livestock investment scheme offered by a local firm named Conexión Ganadera, lured by promises of fixed 7-10% dollar returns and investment materials with bucolic pictures of brown-and-white Hereford cattle.
When she went in search of her cows, Palleiro carried print copies from the cattle registry to see if she could match the 53 tracking numbers linked to this ranch with the tags of the cows staring at her on the opposite side of the fence.
Using her smartphone camera, she zoomed in on the tracking numbers pinned to their ears. It soon became clear few of the numbers matched. Then the cows started backing away. She couldn't get close enough. The exercise felt hopeless.
"It feels like falling into a nightmare," said Palleiro.
Tesla crash
Three of the biggest firms under investigation for fraud are Conexión Ganadera, República Ganadera and Grupo Larrarte, which between them persuaded nearly 6,000 people or investor pools to buy into the programme, investing millions of dollars.
Similar investment schemes exist throughout South America, in Argentina, Brazil and Colombia. Many are legitimate.
Martín Fablet, a local radio presenter in Montevideo, said he invested several times in Conexión Ganadera and other livestock schemes in Uruguay over the past 12 years: "This system of receiving fixed dollar returns worked fantastically well for at least 11 years. They paid me on time."
The first hint of the scandal at Conexión Ganadera came on November 28 last year, when a Tesla Model 3 car crashed at 211 kilometres per hour in the small central Uruguayan city of Florida.
Behind the wheel was Gustavo Basso, one of the co-owners of Conexión Ganadera, which had boomed since opening in 1999.
Weeks after he drove his car into a parked construction vehicle, investors started reporting their payments from the cattle scheme were late, and by January the company confirmed it was short of nearly $250 million. A coroner concluded in April that Basso had died by suicide.
By late January, investors were scrambling to withdraw savings amid reports of fraud. Some filed suits for fraud, leading to bankruptcy proceedings and an official investigation by Uruguay's Prosecutor's Office for Money Laundering Crimes, which remains ongoing. The prosecutor declined to comment to Reuters.
'Maybe the cows were fakes'
Politicians, radio hosts, pensioners and even priests are among the thousands now attempting to recover their savings – and their missing 'phantom' cattle, the number of which is proving hard to pin down.
An inventory of the biggest firm, Conexión Ganadera, carried out by a bankruptcy trustee estimated that as few as 70,000-80,000 of the 804,604 cattle the company claimed to manage actually existed.
In another court case into fraud allegations, Uruguay's Ministry of Agriculture and Livestock (MGAP) said in March that one of Conexión Ganadera's main cattle holding firms, Pasfer, had only 49 of the 3,740 cows that it put up as collateral to secure a loan.
Savers could own cows directly that would be reared and sold for profit by livestock firms, or take an investment stake in the overall scheme.
Palleiro, an urban professional, liked the idea of owning a tangible asset. It seemed a safe bet. She could track the cows via a state-backed online portal – for years an example globally for cattle tracking – which set out breed, age and location. Each cow was supposed to be branded with a symbol assigned by the government and documents listing her assets carried the crest of the agriculture ministry, which oversees the cattle registry.
Uruguay's national cattle registry declined to comment on the cases.
Reuters