Nearly two years after being indicted in a $32 million "check-kiting" scheme against cattle producers, the founder and chief operating officer for the now defunct Eastern Livestock LLC were sentenced Tuesday to jail time. Founder Tommy Gibson was sentenced to 70 months in prison, and COO Steven McDonald was sentenced to 57 months in prison, reports Justin Story for the Daily News in Bowling Green, Ky.
"When the company closed, billions of dollars worth of checks issued from
various bank accounts were deposited in amounts that exceeded the
balances available in those accounts, artificially inflating the
company’s cash collateral account," reports Story. "The company’s line of credit with Fifth Third (Bank) expired Oct. 15, 2010, but
Gibson and McDonald continued the scheme by depositing millions of
dollars of checks from various bank accounts, in amounts exceeding
available balances, into one of the company’s operating accounts with
Fifth Third, according to federal court records."
Federal prosecutors have seized $4.7 million, and will distribute that money to the victims "by way of two bankruptcy cases in Indiana and the
forfeiture action" brought by federal prosecutors, Story reports. (Read more)
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