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May 30, 2013 Agri-Pulse reports: The founder and the former chief operating officer of a livestock brokerage firm were both sentenced last week to federal prison on charges of mail fraud. Their crimes resulted in banks and farmers losing millions of dollars. Company founder and owner Tommy Gibson, 73, of Lanesville, Ind., was sentenced in U.S. District Court in Louisville to 70 months in prison to be followed by two years of supervised release. Michael Steven McDonald, 61, of Lanesville, the former COO, was sentenced to 57 months in prison to be followed by two years of supervised release. The two were found guilty of engaging in a check-kiting scheme between 2004 and 2010. When the company closed, billions of dollars in checks issued from various bank accounts were deposited in amounts that exceeded the balances available in the accounts, artificially inflating the company's cash collateral account, federal officials said. The Indiana-based company processed cattle sales and operated branch facilities in 11 states. "Gibson and McDonald caused widespread damage to the livestock industry and devastating harm to numerous individual cattle farmers in Kentucky and elsewhere," U.S. Attorney David Hale said in a statement. "Many other businesses associated with the livestock industry were also damaged by the Eastern Livestock fraud." Federal prosecutors seized $4.7 million that will be distributed to fraud victims through two bankruptcy cases in Indiana and a forfeiture action brought by the U.S. Attorney's Office of Western Kentucky. "Gibson, McDonald and three other former executives also pled guilty to theft and other charges last year in state court, which gave the Eastern officials probated sentences on the condition that their probation be served concurrently with the federal prison sentences. Tweet |
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