Two former Will County business executives, sentenced to federal prison last month for the multimillion-dollar collapse of a grain elevator company, were charged in an indictment unsealed Wednesday with 49 counts of theft, forgery and other agribusiness laws.
The financial failure of the grain elevator was the largest in Illinois history and creditors and farmers lost tens of millions of dollars when Ty-Walk Liquid Sales Inc. was closed by state regulators in August of 2001.
Illinois Atty. Gen. Lisa Madigan announced the charges against the former chairman of the Minooka–based Ty-Walk and the company’s former vice president at a Morris news conference attended by the state’s attorneys and Farm Bureau leaders from Grundy, Kendall and Will counties.
John Gibbons, the former chairman, and Kathleen Lestina, the former vice president, pleaded innocent at a hearing before Judge Karen Simpson of Kendall County Circuit Court in Yorkville. Gibbons was released on $60,000 bail and Lestina was released on $40,000 bail.
The two are to report to federal prisons on April 15 following pleas of guilty to mail fraud last year in U.S. District Court, Chicago. A lawyer for Lestina, Steven Haney, said he hoped to work out a plea agreement on the most recent state charges. “We have been working on cooperating with the attorney general’s office so it can be done before she goes to prison,” he said.
George Lenard, the defense attorney for Gibbons, said his client was open to a possible resolution of the case.
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Madigan noted that fraud at Ty-Walk depleted a state’s insurance fund that is supposed to protect banks who lend money on grain stored in the elevators and farmers who also store their corn there. State taxpayers paid $4 million into the fund after it ran out of cash.
“Illinois agriculture and the state as a whole has suffered,” said Madigan. “Too often, farmers are hit by natural disasters. Ty-Walk is a man-made disaster that hit Grundy, Kendall and Will County farmers with all the fury and force of a financial tornado.”
Madigan said the indictments represented the strongest cases prosecutors have been able to make so far from evidence one prosecutor said could fill a good portion of a Grundy County courtroom.
She would not rule out the possibility of additional charges. “If there’s more, you’ll find out about it,” Madigan said.
At the time state regulators closed the company, 7 million bushels of corn and thousands of bushels of soybeans were missing from the storage bins, raising questions why state agricultural officials who audit the elevators did not catch the shortage.
Madigan said there was absolutely no evidence that the state Department of Agriculture had done anything wrong.
After the news conference Madigan met with about 90 farmers at a Joliet Elks Club. At that meeting, which was closed to reporters, she told farmers that her office had not investigated the actions of the Department of Agriculture in connection with Ty-Walk, said Mark J. Schneidewind, manager of the Will County Farm Bureau.
In the federal case, Gibbons was sentenced to 46 months in prison and Lestina to 37 months.