Livestock execs plead guilty to theft in Kentucky

By Bryan Cohen | Mar 27, 2012


FRANKFORT, Ky. (Legal Newsline) - Kentucky Attorney General Jack Conway and his office of special prosecutions announced the guilty pleas of four former livestock executives on Tuesday that will result in court-ordered restitution for Metcalfe County farmers.

The pleas were made by former executives of the New Albany, Ind.-based Eastern Livestock LLC, which is now defunct. Thomas "Tommy" Gibson, the company's former CEO, and Steve McDonald, the company's former chief financial officer, pled guilty to all counts against them.

The counts include 17 counts of theft over $10,000, one count of criminal syndication and engaging in organized crime, 11 counts of theft under $500, and 144 counts of theft under $10,000 and over $500.

Criminal syndication is a Class B felony that carries 10 to 20 years in prison. The state will recommend that Gibson and McDonald serve a 10 year prison sentence, concurrent with any federal sentence that is received. Gibson and McDonald still face charges in the U.S. District Court for the Western District of Kentucky.

Darren Brangers, the company's former accountant, and Grant Gibson, a former affiliate of the company and the son of Tommy Gibson, also entered guilty pleas. Brangers and Grant Gibson pled guilty to facilitating several instances of theft committed by McDonald and Tommy Gibson and facilitating the operations of the criminal syndicate run by the co-defendants. Conway will recommend a five-year sentence for the two defendants probated upon the payment of restitution.

Tommy Gibson and McDonald admitted to being part of a criminal collaboration in 2009 and 2010, the purpose of which was to commit theft by falsely inflating the bank accounts of Eastern Livestock. The company used falsely inflated accounts and check kiting to buy cattle from Kentucky producers with funds that essentially did not exist. Fifth Third Bank of Cincinnati closed Eastern's accounts and dishonored the company's outstanding checks in early November 2010 after several bank examinations. The accounts were closed days after Eastern purchased more than $800,000 worth of cattle in Metcalfe County, resulting in the collapse of the company's operations and the bouncing of more than $850,000 worth of checks to producers of cattle.

Conway, with assistance from the Federal Bureau of Investigation, began looking into Eastern shortly after the collapse in November 2010. Conway's office gathered evidence of the ongoing criminal fraud, including tens of thousands of pages of records kept by banks holding Eastern's accounts. Conway's Department of Criminal Investigations worked with the FBI, Robert Stout, Kentucky's state veterinarian, the Kentucky Department of Agriculture and the U.S. Attorney's office - Western District along with other agencies to complete the case.

Under the terms of Grant Gibson's plea agreement, he will fund $680,000 worth of the total restitution while Darren Brangers will fund $210,000 worth of restitution. Conway's office will handle distribution of the restitution to approximately 170 victims. Conway's office has identified all of the recipients of the restitution and will contact affected farmers after plans are finalized for restitution distribution.

Steve McDonald, Darren Brangers and Grant Gibson await final sentencing, which will occur on June 12. Tommy Gibson will be sentenced on June 26.

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