Office of the Attorney General
Attorney General Conway Announces Sentencing of Three Eastern Livestock Executives

Press Release Date:  Tuesday, June 12, 2012  
Revision Date:  Monday, June 25, 2012 
Contact Information:  Shelley Catharine Johnson
Deputy Communications Director
502-696-5659 (office)

Kentucky Attorney General Jack Conway and his Office of Special Prosecutions today announced the sentencing of three former executives of the now-defunct Eastern Livestock, LLC, based out of New Albany, Ind. Barren-Metcalfe Circuit Judge Phil Patton sentenced Eastern's former Chief Financial Officer, 58-year-old Steve McDonald, accountant 43-year-old Darren Brangers and affiliate 48-year-old Grant Gibson for their roles in the on-going criminal collaboration that swindled Kentucky farmers out of nearly $1 million. The sentences include terms that are expected to return, in the form of court-ordered restitution, all of the losses accounted for by the Attorney General's Office in the indictment issued in September of 2010.

Restitution ordered for farmers who sold their livestock at the Metcalfe County auction site totals more than $850,000. The Attorney General's office collected and distributed $300,000 to more than 170 Kentucky farmers last month. As of today, a total of $600,000 has been collected. Additional restitution totaling $300,000 will be distributed to victims in the coming days.

"I appreciate the hard work of my investigators, prosecutors, as well as our state and federal partners, in bringing this case to a successful close," General Conway said. "Kentucky's farmers are an invaluable resource. We have done our best to protect their interests and to ensure that those responsible for this scheme are held accountable."

For his role, McDonald was sentenced today to a term of 10 years in prison, concurrent with any federal sentence received. The sentence will be probated at this time, until McDonald is sentenced in federal court. McDonald and former Eastern Livestock Chief Executive Officer and founder, 71-year-old Thomas "Tommy" Gibson, each still face charges in the U.S. District Court for the Western District of Kentucky for their involvement in the Eastern Livestock fraud.

Darren Brangers, of Louisville, and Grant Gibson, of Lanesville, In., were each sentenced to the maximum five-year sentence, withheld pursuant to pretrial diversion conditional upon full restitution to the named victims. Brangers and Grant Gibson, who is also the son of Eastern founder and CEO Tommy Gibson, each previously pled guilty to facilitating the operations of a criminal syndicate run by Tommy Gibson and McDonald and to facilitating the several instances of theft committed by the co-defendants.

Grant Gibson's sentence includes terms under which he will fund $680,000 worth of the total restitution, with Brangers funding $210,000 of restitution. So far, $500,000 of the restitution has been collected from Grant Gibson and $100,000 collected from Brangers.

Continuing distribution of restitution to approximately 170 victims will be handled by the Office of Attorney General. The Office of the Attorney General has identified all of the recipients and will be contacting affected farmers when plans have been finalized for the restitution distribution.

Tommy Gibson is scheduled for sentencing in Barren-Metcalfe Circuit Court on June 26, 2010.

Eastern Livestock Case History

Tommy Gibson and McDonald each pled guilty in March to all counts against them including, one count of criminal syndication, engaging in organized crime; 17 counts of theft over $10,000; 144 counts of theft under $10,000/over $500; and 11 counts of theft under $500. Criminal syndication is a Class B felony carrying 10 to 20 years in prison.

As part of their guilty plea, both admitted to being part of an ongoing criminal collaboration of several people and/or entities between 2009 and 2010, the purpose of which was to commit on-going theft by falsely inflating the balances of Eastern Livestock bank accounts. By use of falsely inflated accounts and check kiting, Eastern and its principles continued to buy cattle from Kentucky producers with essential non-existent funds.

Following several bank examinations of Eastern's operations, Fifth Third Bank of Cincinnati then decided to close Eastern's accounts and dishonor its outstanding checks in early November of 2010. This happened just days after Eastern had purchased more than $800,000 worth of cattle in Metcalfe County. The result was the collapse of Eastern's operations and the bouncing of more than $850,000 worth of checks to cattle producers.

Following the collapse, investigators and prosecutors with the Kentucky Attorney General's Office, with the assistance of the Federal Bureau of Investigation (FBI), began to piece together the details of the ongoing criminal fraud that had sustained Eastern's operations since at least 2009.

Much of this evidence consisted of tens of thousands of pages of records kept by banks that held Eastern's accounts, particularly Fifth Third Bank of Cincinnati. The Attorney General's Department of Criminal Investigations worked closely with the U.S. Department of Agriculture, Kentucky Department of Agriculture, Kentucky State Veterinarian Robert Stout, Federal Bureau of Investigation, U.S. Attorney's Office - Western District and other agencies in completing the initial investigation.