Four indicted in Eastern Livestock check-kiting scheme 

| 10/6/2011

It’s been nearly a year since Eastern Livestock Co., of New Albany, IN, abruptly ceased operations, leaving truck drivers and cattle producers with worthless checks amounting to more than $130 million for loads they hauled or cattle they sold to the now-defunct company. 

Recently, following a nine-month investigation by the Kentucky Attorney General’s office, four men – former Eastern Livestock owner Thomas “Tommy” Gibson, 71; his son, Grant Gibson, 48; and Steve McDonald, 59, all of Lanesville, IN; and Darren Brangers of Louisville, KY – were indicted on multiple counts by a Metcalfe County, KY, grand jury. 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, according to a statement by the AG’s office.

The indictment also includes “theft by deception” charges against the four defendants.

Thomas Gibson, who ran one of the largest cattle brokerages in the county, has also been indicted in federal court on one count of mail fraud.

While cattle producers were able to file on Eastern’s $875,000 bond under the USDA’s Grain Inspection, Packers and Stockyards Act, truckers who hauled cattle for Eastern haven’t had the same recourse because livestock is an exempt commodity.

However, Shelly Catharine Johnson, deputy communications director for Kentucky’s Office of the Attorney General, told Land Line on Thursday, Oct. 6, that they are urging anyone, including truckers from across the U.S., who “believes they are a victim in this case to contact a private attorney as soon as possible to discuss the case” or contact the Attorney General’s Office of Consumer Protection via email or by phone at 502-696-5300.

“The criminal case into this matter is ongoing, and the rules of professional conduct limit what we can say publicly about the case,” Johnson said.

Eastern’s bank, the Fifth Third Bank of Cincinnati, OH, stated things began to unravel on Nov. 1, 2010. Around that time, a bank audit discovered the check-kiting scheme. Then the Fifth Third Bank asked the court for the emergency receivership, which a Hamilton County court granted. According to court documents, Eastern’s bank accuses the company of a “complicated bank fraud and check-kiting scheme employed by Eastern Livestock to defraud Fifth Third of millions of dollars.”