Published: February 01, 2008 11:36 pm      

Illinois cattle broker files lawsuit against bank

LEWISBURG — A $340,000 lawsuit has been filed by an Illinois cattle broker against First National Bank of Ronceverte and two former bank officials charged this week in federal court in an alleged cattle scam.

The suit, filed in Greenbrier County Circuit Court by Frederic W. Nessler of Springfield, Ill., names the bank, former president and CEO Charles A. Henthorn, and former board member G. Thomas Garten as defendants.

On Thursday, Henthorn and Garten were charged in an information filed by federal prosecutors in Charleston.

Henthorn, of Lewisburg, was charged with taking approximately $10,000 in bribes in exchange for providing bank loans to Kevin Scott O’Brien, 28, of Ronceverte. Garten, of Covington, Va., was charged with aiding and abetting the bribes. O’Brien was also charged with defrauding cattle dealers of $4.2 million in a series of scams, including selling the same cattle to multiple buyers.

The lawsuit was filed Jan. 25, before the criminal charges were lodged.

Nessler, represented by Charleston attorney Chris Smith, claims the alleged misdeeds by Henthorn and Garten artificially inflated O’Brien’s credibility as a businessman, including a $428,000 unsecured loan he had with the bank. The suit also claims Henthorn and Garten allowed O’Brien to “float” or “kite” checks which “improperly represented that O’Brien had financial substance.”

On Jan., 25, 2006, the suit states, Nessler gave O’Brien a check for $306,625 for the purchase of 296 head of cattle. In return, Nessler was to receive $336,625 from O’Brien after selling the cattle to a third party, for about an 11 percent return on his money.

In April 2006, according to the suit, O’Brien sent Nessler a bum check for $340,000 drawn upon his account at The Bank of Monroe. O’Brien, who has filed for bankruptcy, and The Bank of Monroe were not included as defendants in Nessler’s lawsuit.

“The check was returned for insufficient funds,” the suit states. “And the $340,000 was never paid to Nessler.

“The actions of Garten and Henthorn ... in approving loans to O’Brien and allowing O’Brien to float or kite checks had the effect of improperly representing that O’Brien had financial substance.”

Simply put, Nessler says he relied on O’Brien’s financial statements provided by the bank before entering into a business agreement with him. Nessler claims O’Brien’s financial “propping up” by the defendants led him to front O’Brien $306,625.

Moreover, Nessler claims O’Brien “would not have been in business” without the defendants “falsely representing O’Brien’s credibility.” Nessler is asking for $340,000 in damages.

First National Bank chair Ron Snyder, when reached by phone late Friday, said he had not yet seen the lawsuit and was “unable to comment” because of the pending litigation.

Garten referred The Register-Herald to his Charleston attorney, Mike Carey, who did not immediately return an after-hours message left at his office late Friday.

Henthorn could not be reached for comment late Friday and his criminal lawyer has not yet been identified.

— E-mail:

cgiggenbach@register-herald.com