FRANKFORT, Ky. — The Kentucky attorney general’s (AG) office recently announced four indictments in the Eastern Livestock Co. (ELC) case, after a nine-month investigation that began when the company failed to pay approximately $130 million to hundreds of livestock producers across the country.

Attorney General Jack Conway and his Office of Special Prosecutions made the announcement Sept. 22 concerning the “check-kiting scheme that resulted in a loss of more than $840,000 by 172 Kentucky cattle producers and others in late 2010.”

ELC, once one of the largest cattle brokers of its kind in the country, was headquartered in New Albany, Ind., and had been in existence since the 1950s with facilities in 11 states. A call to the company’s office was answered by someone who said the doors had been closed and locked and no one was there except those working for the Trustee of the federal bankruptcy court.

All owners, officers and employees with the company were no longer on the premises, the unidentified woman said.

Four indictments against 71-year old Thomas “Tommy” Gibson, 59-year-old Steve McDonald and 48-year-old Grant Gibson, all of Lanesville, Ind., and 43-year-old Darren Brangers of Louisville, Ky., were handed down by the Metcalfe County grand jury.

According to the AG’s office the four were involved in directing operations for the now-defunct ELC and its related corporation. “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,” the office noted.

Conway said he was particularly appreciative of the help from Kentucky farmers affected in the case. “These are hardworking 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,” he said.

The indictment also charges the 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.”

David J. Hale, U.S. attorney for the Western District of Kentucky, also announced an indictment by a federal grand jury in Louisville against Thomas Gibson and McDonald on a single count of mail fraud.

According to information from his office, “The indictment alleges that between Aug. 9, 2004, and Nov. 2, 2010, in Nelson County, Ky., and elsewhere, the defendants devised 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.”

Hale said, “This indictment and the related seizure of $4.7 million are the products of a lengthy cooperative investigation involving the U.S. Department of Justice, the U.S. Department of Agriculture’s Office of Inspector General, the U.S. Postal Inspection Service, the Federal Bureau of Investigation and the Kentucky attorney general’s office.”

If convicted, Gibson and McDonald could face a maximum sentence of 30 years in prison, a fine of $1 million and a period of five years of supervised release. That may be little consolation to the many victims, including William Rex Elmore, a 77-year-old retiree and farmer from Barren County who lost nearly $34,000 in the scheme.

Elmore said he had planned to get out of the cattle business because of his continuing health problems. He sold – or as he put it, “gave away” – more than 80 head of his 96-head herd at a nearby stockyard operated by ELC.

“They (ELC) wrote me three checks but they weren’t any good,” he said. “I had sold there for several years and I didn’t think about (the checks) not being good.”

Elmore, like many of the victims, had dealt with ELC in the past and said he thought they were all right. He also said a portion of the money he lost was to be used to pay taxes and insurance on his farm.

Elmore added he has little hope of ever recovering any of the money and is unsure of what happens next in the proceedings, but the experience has left him with bad feelings for the company. “They’re out on bond, but you can’t do anything with big people. They’ve got a lot of money hid somewhere, but I don’t know where it’s at,” he charged.

The Kentucky AG’s office has identified that more than 280 of ELC’s alleged victims live in the Commonwealth.