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Order stops former sale barn owner from being in business
SOUTH HUTCHINSON, Kan. (AP)--A former South Hutchinson auction house owner has agreed to a cease-and-desist order that forbids him from operating a similar business for at least five years. Mac Frederick, however, has admitted no wrongdoing in how he operated the Central Livestock Corp. sale barn, according to a decision by the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration, which regulates livestock auctions. The Central Livestock Corp., closed in February 2006, when USDA auditors began investigating the auction house's finances and cattlemen complained that Frederick gave them bad checks. More than 100 ranchers and consigners received notice from their banks that Frederick didn't have the funds to pay them the more than $300,000 they were owed. In January, officials filed a complaint with the USDA. It included multiple accusations, including that Frederick allegedly failed to properly maintain a custodial account and jeopardized payments due to owners and consigners, and that he allegedly wrote $197,000 in bad checks for purchases he made from two sale barns and a rancher through a business he created called Atlas Cattle. Ranchers were paid with money from the sale barn's $75,000 bond. They also received funds from a more than $250,000 settlement reached in Reno County District Court last August. Frederick still owes livestock consignors $45,672, according to the case filing. John Barthel, regional manager at the Grain, Inspection, Packers and Stockyards Administration's office in Denver, said Frederick will have to prove he can correct custodial account shortages before getting back into the sale barn business when the order ends. Barthel said his agency did not issue civil fines, and Frederick does not necessarily have to repay the ranchers. Frederick's last sale was Feb. 7, 2006. The sale barn reopened under new ownership in June 2006 and is now called Hutchinson Commission Co. The action taken against Frederick doesn't affect the new operation. B 7 5/28/07 1 Star WK Date: 5/24/07
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