CINCINNATI – A group of beef producers, stockyard operators and cattle auction houses filed a lawsuit against Cincinnati-based Fifth Third Bank over what the plaintiffs are calling “modern-era cattle rustling”.
The lawsuit — which was filed in Allen Circuit Court in Allen County, Ky. — stems from the case of Eastern Livestock Company, which was at the center of a check-kiting scheme. Fifth Third Bank was the company’s primary lender, according to the lawsuit, and was involved in a $32.5 million structured financing of the company. The lawsuit alleges that the check kiting scheme allowed Eastern Livestock to get more loans from Fifth Third Bank by artificially inflating the company’s revenues.
The bank froze Eastern Livestock’s accounts in 2010 during the height of cattle selling season, which caused the company to bounce checks totaling $30 million. The money was owed to cattle producers and other plaintiffs in the lawsuit.
In April, four former executives of the company pled guilty to Kentucky state charges of theft and deception for their roles in the scheme.
The plaintiffs are seeking the money lost on transactions with Eastern Livestock, which Fifth Third Bank refused to honor, according to the lawsuit. They also are seeking unspecified damages.
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