Published: October 17, 2008 10:55 pm      

Central figure in cattle scam gets 8 years

Two former bank officials receive less than a year

A federal judge sentenced former cattle broker Kevin Scott O’Brien, the Greenbrier County con man who bilked investors out of millions using Ponzi and phantom cattle schemes, to more than eight years in prison Friday in Beckley.

Two other defendants in the celebrated case, former First National Bank of Ronceverte president Charles A. Henthorn and former FNB board member G. Thomas Garten, received prison terms of nine months and five months, respectively, for their convictions in a case that rocked the rural cattle farms of the Greenbrier Valley, home to the top beef producers in the state.

Alone with no friends or family in the courtroom, O’Brien, 26, of Ronceverte, showed little emotion as U.S. District Judge Thomas E. Johnston sentenced him to 97 months in prison and ordered him to pay back his victims more than $3.34 million in restitution. Johnston also ordered O’Brien to five years of supervised release.

O’Brien declined to speak on his behalf when offered by Johnston, opting instead to allow Charleston attorney Rodney Smith to address the court.

Assistant U.S. Attorney Anna L. Forbes said at least three victims had intended to testify at the sentencing hearing, but only one, Karin Nelson of Monroe County, appeared. The court also received “a significant amount of written letters” from O’Brien’s 13 victims, Johnston said.

Nelson, who had no prior cattle dealings before meeting O’Brien, said she had lost more than $500,000, including legal fees, because of his schemes, had suffered humiliation in her community and had been criticized by friends and family for trusting him. To make matters worse, Nelson said, she has been sued by the bankruptcy court trustee in O’Brien’s multimillion-dollar bankruptcy case for over $300,000. Nelson was told the bankruptcy court can recover money she made from O’Brien on certain deals prior to his bankruptcy that was filed in 2006.

“My feelings have gone from shame to anger and I’ve had nightmares and a loss of sleep over this,” Nelson said. “My life has been turned upside down.”

Johnston then named some of O’Brien’s victims and how much was swindled by O’Brien. Those included were: Joseph Burford ($1.2 million), United National Bank ($501,000), Adam Haynes ($43,0000), George Lucas Jr. ($303,000), Lee Edward McClung ($61,877), Robert Dwyer ($344,000) and George Lucas Jr. ($303,322). Victims who had already been paid restitution were not named, he said.

Johnston said he balanced O’Brien’s youth and prior clean criminal record with “pain and distress” he caused his victims to arrive at the sentence. He ordered O’Brien to participate in mental health treatment while incarcerated.

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Johnston handed down a much lighter nine-month prison sentence for Henthorn, who was convicted of taking $9,700 in bribes from O’Brien. Johnston also assessed a $75,000 fine and three years of supervised release.

Johnston also railed on Henthorn, 46, of Lewisburg, for abusing his position of trust in the banking community. He also insinuated this was probably not the only illegal act Henthorn had committed.

“You were living a privileged life and you threw that away,” Johnston said. “This is an example of what can happen when you allow greed to overcome you.”

Former FNB board member James C. Justice II of Beckley was among family and church members who wrote letters in support of Henthorn. One document filed by a court official indicated the defendant called his probation officer on June 4 and asked her if “she would remove the negative” letters from his support file.

“The probation officer responded she would not do so ... Mr. Henthorn was obviously upset by this answer and ended the conversation soon thereafter,” wrote U.S probation officer Peggy Adams.

Johnston also asked a rhetorical question about Henthorn’s former employers.

“I’m puzzled by the fact that First National Bank has not participated at all in this hearing,” the judge said. “I expect the whole story has yet to be told.”

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Garten, a former eight-year FNB board member convicted of aiding and abetting O’Brien’s bribe money to Henthorn, received five months in prison, a $50,000 fine and three years of supervised release.

Garten had about 15 friends and family members present for the hearing, including former state Commerce Secretary and ex-FNB president Tom Bulla, who Johnston vocally noted had come to support Garten. Johnston said individuals filed more than 100 letters of support for Garten, “the most I’ve ever seen in a case.”

But prior to handing down Garten’s sentence, Johnston’s mood quickly changed and he began questioning Garten’s motives and actions in the case. He also briefly mentioned the fraud problems associated with banking and the recent sub-prime lending scandals, but noted the difference in the criminal cases.

“You participated in a sorry effort to cover this up ... which almost resulted in an obstruction charge,” Johnston said.

“Is this the way business is done in Greenbrier County? By being present when a bribe is slid across the table to a bank president?

Johnston then asked why Garten would have risked so much by setting up the bribes, but then not receive any money in return. Johnston also suggested this was not Garten’s first brush with illegal activity. Forbes told the court Garten turned down bribe money when approached by O’Brien.

“Why would a man of your experience get involved with this?” Johnston asked.

All three defendants were allowed to remain free on $10,000 bond until they report to prison. Each defendant also requested to be incarcerated as close to Greenbrier County as possible. Forbes said the defendants will most likely enter prison within the next 30 to 45 days.

Court documents have indicated the case is still being investigated.

— E-mail: cgiggenbach@register-herald.com