State officials took unusual steps to try and stop Gallatin Livestock Auction from doing business this past Monday without success. A second attempt to permanently close down the business is still pending.
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Daviess County Circuit Clerk Pam Howard was directed by the Missouri Attorney General’s office to conduct business Saturday, Nov. 12. The state then filed an application for a temporary restraining order and a preliminary injunction against Gallatin Livestock Auction in an attempt to stop the Monday, Nov. 14 sale at the livestock barn.
That application states that Gallatin Livestock Auction failed to honor a contract with William Merydith of Perryton, Texas, failing to pay him the proceeds for sale of livestock on Sept. 10, 2011.
A hearing was conducted by Judge Thomas Chapman at the unusual hour of 7:15 a.m. on Monday. Defendant Daniel Froman appeared in court, represented by attorney Joel Pelofsky, to argue against the petition. Judge Chapman ruled to allow Monday’s livestock sale to be conducted as usual.
State officials also filed a verified petition for injunctive relief and temporary restraining order on Saturday. The intention of this action is to stop future sales at Gallatin Livestock Auction. The hearing on this petition is scheduled before Judge Chapman on Thursday, Nov. 17 at 1:30 p.m.
This petition states that Gallatin Livestock Auction has violated the Missouri Livestock Marketing Law. William Merydith has filed a claim against the trust fund agreements held by the Missouri Department of Agriculture and Horizon State Bank of Cameron on behalf of Gallatin Livestock Auction because Merydith has not been timely paid for the sale of his livestock.
Based on the claim of Merydith, the State is asserting grounds to revoke the license of Gallatin Livestock Auction. The petition states that, because the sale barn has failed to pay Merydith for livestock already sold, Gallatin Livestock Auction may be insolvent.
The State is asking for a temporary restraining order and preliminary and permanent injunction prohibiting Gallatin Livestock Auction from selling livestock until the Director of Agriculture takes action on the defendant’s license. The director may revoke the license only upon 10 days notice to the market and a public hearing.
The plaintiffs in the case are the State of Missouri; Chris Koster, Attorney General; Dr. Linda Hickam, State Veterinarian; and Jon Hagler, Director of the Missouri Department of Agriculture. Defendants listed in the case are R&K Real Estate Inc. and Daniel Froman d/b/a Gallatin Livestock Auction.
Local charges dropped in grain case
In Daviess County yesterday (Nov. 14), the 22 local counts of grain theft, theft and filing false financial statements that were still pending against Daniel and Pauline Froman in the Gallatin Grain Company case were dismissed by Prosecutor Annie Gibson. The charges were dismissed by the local prosecutor pursuant to the request of the U.S. Attorney’s office. The Fromans have pled guilty to federal charges and are awaiting sentencing.
Both Daniel Froman and his wife Pauline Froman recently accepted plea agreements in the Western District of Missouri for a scheme that stole over $3 million from 100 northwest Missouri farmers. The Fromans voluntarily surrendered the Gallatin Grain Company grain warehouse and dealer licenses to state officials in February 2009. Over 100 claims were made against the company.The total claims against Gallatin Grain Company were in excess of $4.5 million, as announced at an administrative hearing held by the Department of Agriculture on May 28, 2009. Storage claims totaled $1,530,488, grain dealer claims totaled $1,799,253, ineligible claims totaled $201,227, and withdrawn claims totaled $1,164,418.91. Withdrawn claims were those where claimants accepted assets in exchange for their withdrawal from the claim process.
In the grain case, the Fromans were indicted in federal court on April 21 for bank fraud, wire fraud, mail fraud, conspiracy and interstate transportation of stolen goods. Each has plead guilty to the mail fraud.
A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office. Daniel Froman is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Pauline Froman is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution.
Another case pending against Daniel Froman is also moving forward, with a conference call scheduled for Nov. 17. This case alleges sexual assault and two counts of tampering with a witness in a felony prosecution. It is set for trial on Feb. 28, 2012, before Judge Roger Prokes.