Agricultural News
The Deceit Eastern Livestock Used in Bilking Cattlemen of Millions of Dollars Is Amazing- and Under the Magnifying Glass This Week in Denver
Thu, 03 Feb 2011 5:58:55 CST
The Chief Economist of the National Cattlemen's Beef Association says that one of the major Committee Meetings at the 2011 Cattle Industry Convention will focus on the Eastern Livestock Bankruptcy- and Doud says that they will spend most of the time on this issue asking a key question- "What do we need to do to prevent this from happening in the future?" The Live Cattle Marketing Committee meeting is scheduled for Friday here in Denver.
Eastern Livestock filed bankruptcy in early December of 2010- with up to $l30 million dollars in hot checks being held by cattle producers across the country. After they had turned over control of their livestock to Eastern, they took these checks to the bank and they bounced. Eastern, a market agency that bought and sells feeder cattle as a dealer and on an order-buying basis, began issuing unfunded checks to producers for livestock purchased by the company in different markets on or around Nov. 3, according to the United States Department of Agriculture.
According to court documents filed in Hamilton County Court of Common Pleas in the state of Ohio, Fifth Third Bank alleges a complicated bank fraud and check-kiting scheme. They were the principle banker for Eastern Livestock.
According to the court documents, Eastern Livestock has engaged in a "sophisticated check-kiting scheme involving the deposit and withdrawal of thousands of checks into and out of its Fifth Third account and accounts at various other banks, even though there were insufficient funds to cover the checks that Eastern Livestock was purporting to deposit and withdraw."
Taking advantage of the "float," the delay in one bank's returning an item for insufficient funds to another, creating a provisionally credited balance in the account to which the "deposit" was made, "Eastern Livestock cycled checks between its various bank accounts to create an artificially high balance among those accounts and then withdrew million of dollars in provisionally credited funds."
We discuss the aftermath of the Eastern Livestock mess with Doud, who says that as more has come out about the scheme that Eastern was running as they bought and sold cattle, the complexity of how they were juggling money and cattle is astounding. We hear about that and what the Cattle Industry thinks about what needs to be done in response on today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the state on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the listen bar below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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