By CRISTINA JANNEY
PLAINVILLE — Dozens of area ranchers are still waiting on their money after checks worth tens of thousands of dollars per producer bounced in a check-kiting scheme involving the Plainville Livestock Commission.
As the case has unraveled, ranchers have expressed shock and disappointment in the Tyler Gillum and his wife who owned the Livestock Commission, betrayal by the federal regulators who were supposed to protect the ranchers, and frustration at the legal proceeding that seem to be dragging on.
Rex Mulder of Mulder Farms in Logan said his family business has borrowed money to keep going as a result of not being paid for cattle they sold at the Plainville Livestock Commission.
He said the case has caused stress for his family and the entire ranching community.
Wes Cook, Plainville rancher, said he is hanging on for now without taking on more debt, but it has been difficult.
“I don’t know if I will ever see all of it,” Cook said of the money he is owed.
Checks from the Plainville Livestock Commission for two sales — one at the end of January and the other on Feb. 5 — bounced.
Money that was supposed to be set aside to pay cattle sellers was transferred from a custodial account to the Plainville Livestock Auction’s operating account. The Almena Bank froze both accounts, which resulted in bounced checks.
Almena Bank filed an interpleader case, which is legal action that seeks to determine to whom the money that was transferred out of the custodial account belongs.
Almena Bank has paid $916,652.29 into the Court Registry in the interpleader case, according to court records. That money is being held until the ranchers’ case is settled.
Plainville Livestock Commission declared bankruptcy on March 1. The interpleader case has been transferred from Norton District Court to federal bankruptcy court. The ranchers’ case is pending separately from the main bankruptcy proceedings and is still working its way through the court system.
“I was shocked and disappointed. They seemed trustworthy,” Mulder said of the Gillums when he had found out they had been indicted on federal charges.
The Gillums are charged with 31 counts of bank fraud, one count of making a false statement to the Small Business Administration in an application for a $1.5 million loan, and one count of making a false statement to Almena State Bank in an application for a $500,000 line of credit.
The indictment alleges investigators examined unfunded checks and wire transfers totaling more $2 billion sent by Tyler Gillum as part of the scheme.
The indictment alleges the Gillums defrauded Almena State Bank in Almena; Landmark Bank in Manhattan; Colorado East Bank and Trust in Lamar, Colorado; Astra Bank in Scandia; TBK Bank in Dallas; Guaranty State Bank in Beloit; and The Bank in Oberlin.
“I think something should be done,” Cook said of the Gillums. “They should lock him up or something.”
Mulder expressed frustration with the USDA, which regulates market agents like the Gillums under the Packers and Stockyards Act.
“The USDA failed us,” he said. “They should have shut them down. It should not have gotten to this point.”
The Plainville Livestock Commission had been cited before for not having sufficient funds in its custodial account, which by law is to hold money owed to cattle sellers.
Multiple filings have happened since the case was transferred to the bankruptcy court. Fifty-six parties to the case are listed on court records.
Parties in the case had until Friday, June 7, to object to any monetary claims filed in the case. Almena Bank did file objections on multiple claims and those people and entities have until June 21 to file responses to the objections.
James Overcash, the trustee for the bankruptcy estate, has filed a claim as a part of the interpleader case. That filings says that Overcash believes part of the money that is now being held by the court in interpleader case should be part of the bankruptcy estate.
However, other filings claim all of the money that was frozen by Almena State Bank should be used to pay unpaid cattle sellers.
The court hearing to discuss this and the other responses to disputed claims to the money that was frozen by Aleman Bank is set for 10:30 a.m. July 11.
An attempt was made to contact the Gillums’ bankruptcy attorney, but the call was not returned.