By AMANDA LOVIZA
Glasgow Daily Times
Four men indicted on charges of organized crime and theft by deception in the Eastern Livestock case were arraigned Tuesday in Metcalfe Circuit Court.
The indictment in Metcalfe Circuit Court of Thomas Gibson, 71, McDonald, 59, and Grant Gibson, 48, all of Lanesville, Ind., and Brangers, 43, of Louisville, accuses the four men of engaging in organized crime between 2009 and 2010 by collaborating on a continuing basis in a criminal syndicate, the purpose being to commit theft. Along with the charges of organized crime, they are also charged, 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. The four men’s indictment counts 172 Kentucky cattle producers as victims, with a total loss of more than $840,000.
The Eastern Livestock bankruptcy and subsequent criminal investigations rocked farmers across Kentucky and others across the nation when Eastern Livestock Company, LLC, was exposed last November for writing millions of dollars worth of bad checks. Local farmers were hit especially hard on Nov. 2, 2010, when they sold approximately $900,000 worth of cattle at the Edmonton livestock market and received worthless checks from Eastern Livestock in return.
Tuesday morning, the four defendants appeared before Judge Phil Patton in Edmonton to enter pleas and set bail. All four pleaded not guilty. Thomas Gibson, Grant Gibson and Brangers were each remanded to post 10 percent of a $250,000 unsecured cash bond, while McDonald was remanded to pay 10 percent of a $100,000 unsecured cash bond, due to being “thoroughly cooperative” with the prosecution, according to Assistant Attorney General F. Todd Lewis.
After scheduling when each defendant should report to the Barren County Detention Center and post his bail, Patton ordered the defendants to return to Metcalfe Circuit Court on Nov. 22 at 9 a.m. for a pre-trial hearing.
The Kentucky Attorney General’s office mailed letters at the end of last week to everyone named as a victim in the Eastern Livestock case, inviting them to attend the arraignment. After the court proceeding, Todd Lewis and Jeff Prather, assistant attorneys general, and representatives from the victim’s advocate and criminal investigations divisions of the AG’s office met with the Eastern Livestock victims in attendance. Lewis and Prather said the attorney general’s office is trying to reach out to all local Eastern Livestock victims and make sure all the victims’ names, bad checks and documentation are collected over the next six weeks before pre-trial. There is a strong case against the four defendants, Lewis said.
“We’re looking forward to prosecuting the case in the court,” Lewis said.
Any farmer who received a bad check from Eastern Livestock and has not received any communication from the attorney general’s office can still call them, Lewis said, so the prosecution has a record of all the victims.
Thomas Gibson and McDonald, owner and operator, respectively, of Eastern Livestock, were indicted in federal court last week as well, on charges of mail fraud for their part in the check-kiting scheme that affected approximately 200 cattle sellers in Kentucky along with Fifth Third Bank and Wells Fargo Bank. Between Aug. 9, 2004, and Nov. 2, 2010, Thomas Gibson and McDonald are accused of devising a scheme to intentionally cause the deposit of billions of dollars worth of checks issued from various bank accounts, in amounts that exceeded available balances in those accounts, in order to artificially inflate balances in Eastern Livestock’s cash collateral account, according to the indictment. By artificially inflating the cash collateral account, Eastern Livestock was able to continue its $32 million line of credit with Fifth Third Bank. When Eastern Livestock’s line of credit expired on Oct. 15, 2010, Thomas Gibson and McDonald allegedly continued their check-kiting scheme and issued millions of dollars worth of bad checks, according to the indictment.
The state charge of organized crime is a class B felony, which carries no less than 10 years imprisonment and no more than 20 years imprisonment, according to the indictment. Theft by deception over $10,000 is a class C felony that carries five to 10 years in prison, theft by deception over $500 is a class D felony that carries one to five years in prison and theft by deception under $500 is a misdemeanor which carries up to 12 months in jail.
If Thomas Gibson and McDonald are found guilty of the federal charge of check-kiting, they face a maximum sentence of 30 years in prison, a fine of $1 million and a period of five years supervised release.
Bankruptcy petitions are pending against Eastern Livestock and Thomas P. Gibson.
Eastern Livestock had stockyard operations in 11 states across the Mid-South, Midwest and West, along with doing business with ranchers in 30 states. Those indicted in the case are considered innocent until proven guilty.