Attorney General Jack Conway today announced that his staff will be in Cave City, Ky. on Saturday to distribute the first installment of restitution checks from the Eastern Livestock settlement. Staff will be at the Cave City Comfort Inn, 819 Sanders Street, from 8 a.m. to 4 p.m. Restitution recipients should have received letters in the mail this week alerting them to the process. Recipients will need to attend the event on Saturday and bring the letter and photo identification with them.
The Office of the Attorney General has identified 173 victims from the Metcalfe County auction that are entitled to the restitution. On Saturday, victims will receive their first installment payment, which in total equals $300,000. Each recipient will receive a payment pro-rated according to his losses. More installment payments will be made to victims at a later date.
In March, Attorney General Conway announced that his office secured an almost $900,000 settlement for Eastern Livestock victims.
Eastern Livestock Case History
Former Eastern Chief Executive Officer and founder, 71-year-old Thomas “Tommy” Gibson, and Eastern’s former Chief Financial Officer, 58-year-old Steve McDonald, each pled guilty to all counts against them. Those counts included: one count of criminal syndication, engaging in organized crime; 17 counts of theft over $10,000; 144 counts of theft under $10,000/over $500; and 11 counts of theft under $500. Criminal syndication is a Class B felony carrying 10 to 20 years in prison. The Commonwealth will recommend a 10-year prison sentence for McDonald and Gibson, concurrent with any federal sentence received. Each still faces charges in the U.S. District Court for the Western District of Kentucky.
Gibson and McDonald admitted to being part of an on-going criminal collaboration of several people and/or entities between 2009 and 2010, the purpose of which was to commit on-going theft by falsely inflating the balances of the bank accounts of Eastern Livestock. By use of the falsely inflated accounts and check kiting, Eastern Livestock and its principles continued to buy cattle from Kentucky producers with essentially non-existent funds. Following several bank examinations of Eastern’s operations, Fifth Third Bank of Cincinnati then decided to close Eastern’s accounts and dishonor Eastern’s outstanding checks in early November of 2010. This happened just days after Eastern had purchased more than $800,000 worth of cattle in Metcalfe County. The result was the collapse of Eastern’s operations and the bouncing of more than $850,000 worth of checks to cattle producers.
Shortly following Eastern’s collapse in November, 2010, investigators and prosecutors with the Kentucky Attorney General’s Office, with the assistance of the Federal Bureau of Investigation, began to piece together the details of the ongoing criminal fraud that had sustained Eastern’s operations since at least 2009. Much of this evidence consisted of tens of thousands of pages of records kept by banks that held Eastern’s accounts, particularly Fifth Third Bank of Cincinnati. The Attorney General’s Department of Criminal Investigations worked closely with the U.S. Department of Agriculture, Kentucky Department of Agriculture, Kentucky State Veterinarian Robert Stout, Federal Bureau of Investigation, U.S. Attorney’s Office - Western District and other agencies in completing the initial investigation.
Eastern Livestock accountant 43-year-old Darren Brangers of Louisville and former Eastern Livestock affiliate 48-year-old Grant Gibson of Lanesville, Ind., who is the son of Eastern founder Tommy Gibson, also entered guilty pleas. Brangers and Grant Gibson each pled guilty to facilitating the operations of the criminal syndicate run by Tommy Gibson and Steve McDonald, and to facilitating the several instances of theft committed by the co-defendants. The Kentucky Attorney General will recommend a five-year sentence for each of these defendants, probated upon payment of restitution.
Defendant Grant Gibson’s plea agreement includes terms under which he will fund $680,000 worth of the total restitution, with defendant Darren Brangers funding $210,000 of restitution.
Final sentencing for Steve McDonald, Darren Brangers and Grant Gibson is June 12 before Barren-Metcalfe Circuit Judge Phil Patton. Tommy Gibson will be sentenced on June 26.
