Attorney General Jack Conway and his Office of Special Prosecutions today announced the indictment of four people in connection with a check-kiting scheme that resulted in a loss of more than $840,000 by 172 Kentucky cattle producers and others in late 2010. The indictments follow a nine-month investigation by General Conway’s Department of Criminal Investigations that began when Eastern Livestock failed to pay nearly 800 producers nationwide an estimated $130 million.
A Metcalfe County grand jury returned a multi-count indictment today against 71-year-old Thomas “Tommy” Gibson, 59-year-old Steve McDonald and 48-year-old Grant Gibson, all of Lanesville, In. and 43-year-old Darren Brangers of Louisville, Ky., all of whom were involved in directing the operations of the now-defunct Eastern Livestock, LLC and related corporations. The indictment alleges that all four defendants engaged in organized crime between 2009 and 2010 by collaborating on a continuing basis in a criminal syndicate, the purpose of which was to commit theft.
“I am particularly appreciative of the help we’ve gotten from Kentucky farmers who were caught-up in this scheme,” General Conway said. “These are hard-working families who have struggled to buy farm equipment, pay their mortgages and even put food on the table after being swindled out of money they were owed for cattle.”
The indictment further charges all four defendants, by complicity, with 17 counts of theft by deception over $10,000, 144 counts of theft by deception over $500 and under $10,000 and 11 counts of theft by deception under $500.
Engaging in organized crime is a Class B felony, carrying no less than 10 years imprisonment, and no more than 20 years imprisonment. Theft by deception over $10,000 is a Class C felony carrying five to 10 years imprisonment, theft by deception over $500 is a Class D felony carrying one to five years imprisonment and theft by deception under $500 is a misdemeanor carrying up to 12 months jail.
With today’s indictment, the grand jury also issued a report referring all matters involving unindicted defendants to a subsequent grand jury. The Attorney General’s investigation identified that more than 280 of Eastern Livestock’s victims live in Kentucky.
The Attorney General’s criminal investigation into this matter began in December of 2010 following a referral from the Attorney General’s Office of Consumer Protection. General Conway’s Consumer Protection office established a hotline for victim cattle producers after reviewing a multitude of complaints from producers who had received bad checks for livestock sales in late 2010. At the time, Eastern Livestock was one of the largest cattle brokerages in the nation.
As part of its investigation, the Attorney General’s Office has worked closely with the U.S. Department of Agriculture, Kentucky Department of Agriculture, Kentucky State Veterinarian Robert Stout, Federal Bureau of Investigation and U.S. Attorney’s Office, Western District, among other agencies.
Prosecution of this case is being handled by the Attorney General’s Office of Special Prosecutions at the request of the local Commonwealth’s Attorney, with investigative assistance by the Attorney General’s Department of Criminal Investigations.
An indictment is an accusation only. All Defendants are presumed innocent unless and until proven guilty.