FRANKFORT, KY. – Four former executives for Eastern Livestock Company recently pled guilty to Kentucky state charges of theft and deception for their roles in a check-writing scheme.

Thomas Gibson, owner of Eastern Livestock, and Michael Steven McDonald, the company’s chief financial officer, both pled guilty to one count of engaging in organized criminal activity and 172 counts of theft. The Kentucky Attorney General’s Office is recommending a 10-year prison sentence for McDonald and Gibson concurrent with any federal sentence received.

Also entering guilty pleas were Darren Brangers, a former accountant for Eastern Livestock, and Grant Gibson, an affiliate of the company. Brangers and Grant Gibson each pled guilty to facilitating the theft committed by Thomas Gibson and McDonald. The attorney general is recommending five-year sentences for Brangers and Grant Gibson, probated upon payment of restitution.

Grant Gibson’s plea agreement includes payment of $680,000 in restitution. Brangers’ restitution payment totals $210,000. The money will compensate 170 victims of the alleged crimes. McDonald, Brangers and Grant Gibson will be sentenced June 12. Thomas Gibson will be sentenced June 26.

Thomas Gibson and McDonald admitted to participating in an on-going criminal collaboration of several people and/or entities between 2009 and 2010, in order to commit on-going theft by falsely inflating the balances of the bank accounts of Eastern Livestock, according to the attorney general’s office. The defendants used the falsely inflated accounts and check kiting to continue to buy cattle from Kentucky producers with essentially non-existent funds.

Following several bank investigations of Eastern's operations, Fifth Third Bank of Cincinnati decided to close the company’s accounts and dishonor the outstanding checks in early November, 2010. The attorney general’s office said 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.

Investigators and prosecutors with the Kentucky Attorney General’s office, with help from the Federal Bureau of Investigation, began to piece together the details of the fraud following Eastern’s collapse.