An Indiana livestock brokerage is under federal investigation after issuing millions of dollars in worthless checks for cattle on the market earlier this month. "The U.S. Department of Agriculture says Eastern Livestock Co. wrote at least $81 million in worthless checks to cattle producers around the country between Nov. 3 and Nov. 9," Harold J. Adams of the Courier-Journal reports. "The agency said it is working with the Justice Department to investigate the situation."
Last week Cincinnati-based Fifth-Third Bank froze the New Albany, Ind., company's accounts and filed a legal complaint that accused the company of stealing at least $13 million from the bank "in a sophisticated check-kiting scheme." The bank also claims Eastern defaulted on a $32.5 million loan that was due last month, Adams writes. Eastern did not respond to telephone messages left by the Courier-Journal, and Fifth-Third declined to comment, citing the pending legal action.
The situation has left some cattlemen empty-handed, Adams writes. "While unknown to most people outside of the industry, Eastern 'is one of the largest cattle brokerage companies in the United States,' according to a USDA spokesman," Adams writes. "The company buys and sells cattle in all 48 contiguous states through operations in 11 states, from the mid-South to the West." The Kentucky Cattlemen's Association reports about 200 Kentucky producers sold cattle to Eastern during the affected period. (Read more)
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