Glasgow Daily Times, Glasgow, KY

Local News

December 5, 2010

Eastern Livestock case under investigation

GLASGOW — The case against Eastern Livestock might be taken to federal and state courts if agents find that the company broke Kentucky state laws in failing to pay millions of dollars to cattlemen.

State agriculture commissioner Richie Farmer and Attorney General Jack Conway are working together, along with the United States Department of Agriculture Office of the Inspector General, the U.S. Postal Inspection Service, the Federal Bureau of Investigation and the U.S. Attorney’s Office, western district of Kentucky, to assist in the federal investigation of the livestock marketing company that now owes up to $130 million to producers nationwide.

“Many Kentucky farmers are deeply upset over this turn of events,” Farmer said in a statement released Thursday. “For many producers, the amount of money involved is a significant part of their livelihoods. I will work with the attorney general to determine if any state laws were broken, and we will pursue this case to the fullest extent of the law.”

When the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Adminis-tration filed an administrative complaint on Nov. 19, the Kentucky Department of Agriculture revoked Eastern’s license to operate in the state. The complaint was filed after Eastern allegedly began issuing unfunded checks to producers for livestock purchased on or around Nov. 3, according to a release by the attorney general’s office. One of the markets involved was the Edmonton Livestock, where many local farmers went to sell their cattle.

On Nov. 10, Fifth-Third Bank of Cincinnati filed suit against Eastern and the company was appointed a receiver to represent the company, Elizabeth M. Lynch, of Development Specialists, Inc., Cleveland, Ohio, according to the Livestock Marketing Association, who have been in discussions with Eastern about how to handle the situation best.

As for those affected in Kentucky, the process is beginning for all the agencies involved.

“The investigation is really just getting started,” said Shelley Johnson, spokesperson for the Kentucky attorney general’s office. “We encourage any of the farmers who are owed money to help with the investigation by filing a complaint with their office. Farmers can email their information to consumer.protection @ag.ky.gov or call (502) 696-5300.”

Cattle producers who have done business with Eastern Livestock and have not received payment are also encouraged to contact GIPSA’s Midwest Regional Office in Des Moines, Iowa, to find out about their rights under the bond provisions of the Packers and Stockyards Act. Dana Stewart, spokesperson for GIPSA said they have been receiving many bond claims since the complaint was filed and are currently processing all bond claims received.

Producers may contact the GIPSA regional office at (515) 323-2579 for complete information on available financial protections and for forms necessary for filing a bond claim. Bond claims must be filed within 60 days from the date of the transaction on which the claim is based, GIPSA said.

Eastern Livestock, formerly of Louisville but now based in New Albany, Ind., has operations in 11 states across the Mid-South, Midwest and West, including Kentucky. GIPSA estimates that Eastern Livestock owes money to more than 750 sellers in Kentucky and 29 other states.

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