By CRISTINA JANNEY
Federal sentencing for Tyler Gillum, the former owner of the Plainville Livestock Commission, is set for July 21.
This is the end of a story that has spanned seven years, saw ranchers stretched to their financial limits, banks defrauded of millions of dollars and the demise of a rural bank.
Despite the trail of economic turmoil left behind in this case, the local community is seeking a comeback.
Gillum, the former owner of the Plainville Livestock Commission, was convicted in U.S. District Court on April 22 on 31 counts of bank fraud, one count of making a false statement in connection with a Small Business Administration guaranteed loan, and one count of making a false statement in a loan or credit card application.
Gillum, 51, of Plainville owned and operated Plainville Livestock Commission Inc. from 2006 until 2019.
Between January 2015 and August 2017, Gillum wrote checks and made wire transfers between various accounts under his control at various banks in a scheme commonly known as check kiting, according to the U.S. Attorney's Office.
This is when checks are continually written back and forth to fraudulently inflate account balances tricking banks into honoring checks written with insufficient funds. Gillum’s scheme resulted in losses of more than $10 million to the banking system, according to the U.S. Attorney's office.
Bank officials stepped in February 2019. Almena Bank froze the Gillum's accounts, including a custodial account, which was supposed to hold money due to ranchers who sold cattle at Gillum's livestock auctions.
Checks from the Plainville Livestock Commission for two sales — one at the end of January and the other on Feb. 5, 2019 — 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.
Ranchers who were due more than $900,000 in auction proceeds had to wait more than 10 months to receive payment for their cattle.
Plainville Livestock Commission declared bankruptcy on March 1, 2019.
On March 28, 2019, Almena Bank of Almena stipulated to a consent order with the Federal Deposit Insurance Corp. to correct what court records called “unsafe and unsound banking practices and violations of laws and regulations.”
In October 2020, Almena Bank failed. "The $69 million-asset bank was closed by its state regulator, then sold by the FDIC to Equity Bank in Andover," according to a story in the American Banker on March 26, 2021.
The American Banker quoted an FDIC report on the closure, which said, “The board’s performance and management were considered to be critically deficient.”
The FDIC report did not specify the Gillum case as a factor in the bank's closure; however, it said [Bank Chairman Shad] Chandler led "an aggressive growth strategy that involved using higher-cost wholesale funds to back a push into large Small Business Administration and Department of Agriculture loans."
According to the American Banker story, Almena Bank's failure cost the FDIC’s Deposit Insurance Fund $18 million.
In May 2019, a grand jury returned a federal indictment against Tyler Gillum and his wife, Camden. Charges against Camden were later dropped.
The assets of the Plainville Livestock Commission were auctioned in June 2019. Court records indicated $14.5 million was owed at the time of the sale. The sale came up far short of the money owed.
The Plainville Livestock Commission property in Plainville sold to Flatland Holding LLC for $850,000. According to a report from the court trustee, the total gross from the auction of the personal property and equipment from the bankruptcy auction was $405,682.
A federal court in November 2019 ordered cattlemen to receive full payments from the Plainville Livestock Commission sales in January and February.
At the time of those payments, Derek Stockman, a rancher, said he had to restructure his loans as he waited for payment in the case and lost about $2,000 in interest as his payment from the Feb. 5 auction was being held by the courts.
"It added a lot of financial stress ... and tension with the bankers and stuff like that," he said at that time. "I didn’t expect that we would get it all."
The Plainville Livestock Commission bankruptcy and the related delay of payments to ranchers, not only affected those ranchers who were due money, but had a trickle-down effect on the entire community.
Roger McEowen, a Washburn law professor, spoke to cattlemen following the Gillum bankruptcy and noted there is a multiplier of three to four times in the community associated with this agriculture revenue. With almost $1 million owed to producers, that equaled $3 million to $4 million that had been taken out of circulation in the local economy.
Roger Hrabe, director of the Rooks County Economic Development, acknowledged 2019 was a rough year for the community. In addition to the Plainville Livestock Commission closing, Chuck Comeau and his Dessin Fournir furniture company also declared bankruptcy within a month of the Plainville Livestock Commission closure.
However, Hrabe said Plainville is rebounding.
Several of the companies owned by Chuck Comeau's Dessin Fournir have been purchased and reopened.
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The livestock auction is now being operated by Heartland Regional Stockyards owned by Lloyd and Judy Schneider.
Hrabe said the new owners of the stockyards, as well as the former Dessin Fournir companies, have all expanded since they were purchased by their new owners.
A co-working space, boutique and mortgage company have all opened in downtown Plainville in the last year. A new child care center and preschool are coming to the community, and a feasibility study is in the works for a new senior care facility.
"We have downtown Plainville Inc. that is made up of some very energetic people, and they are doing some good things," Hrabe said. "They have some building renovations too that ultimately lead to something good down there."
Unemployment rates in Rooks County remain very low — in the 2.5 percent range. There are more local job listings than Hrabe has seen in years.
Hays Post attempted to contact Gillum's defense attorney for a comment on the conviction. Hays Post also asked if Gillum intends to appeal the conviction, but a call was not returned.
Hays Post reached out to the attorneys for Equity Bank, which bought Almena Bank. No one returned a phone call. Hays Post also reached out to representatives of Landmark Bank and TBK Bank, who were also listed in the case. No one returned phone calls.