(MAYFIELD, Ky.) — Three major financial institutions are facing a class action lawsuit alleging they enabled a massive investment fraud that bilked Kentucky residents out of millions through a non-existent cattle operation.
The Bryant Law Center of Paducah, along with partner firms, filed the lawsuit Thursday in Graves County Circuit Court against Community Financial Services Bank (CFSB), RABO AgriFinance, and Mechanics Bank. The legal action stems from what prosecutors describe as a “ghost cattle” Ponzi scheme orchestrated by the late Brian McClain, a Benton-area farmer and businessman who died by suicide in 2023 as investigations closed in.
The Alleged Scheme
According to the complaint, McClain convinced investors—many of them ordinary Kentucky residents—to pour their life savings into what appeared to be a profitable cattle investment operation. The promised livestock never existed, court documents allege, and early investors were paid returns using money from newer victims in classic Ponzi fashion.
Banks’ Alleged Misconduct
The lawsuit paints a picture of financial institutions that ignored mounting red flags while profiting from their relationships with McClain:
Headquartered in The Netherland’s, RABO AgriFinance allegedly extended more than $70 million in credit to McClain despite documented concerns about his poor recordkeeping and questions about actual cattle ownership.
Benton, Kentucky based Community Financial Services Bank is accused of allowing McClain’s accounts to remain overdrawn for more than 100 days at a time—sometimes by amounts exceeding $1 million—while failing to investigate suspicious intercompany transfers.
Mechanics Bank of Northern California allegedly knowingly participated in a pattern of irregular overdrafts and transfers that should have raised compliance concerns.
The complaint alleges that CFSB was particularly aware of McClain’s deteriorating financial position throughout the scheme’s duration but failed to take action despite dramatic changes in his account activity.
Legal Claims and Damages
The class action brings multiple charges against the banks, including aiding and abetting breach of fiduciary duty, enabling theft by deception, gross negligence, securities fraud assistance, and civil conspiracy.
The legal team is seeking compensatory and punitive damages, attorney fees, and additional relief for the affected investors. The case represents victims primarily from Graves County who lost substantial sums in the alleged fraud.
Broader Pattern
This class action follows an earlier complaint filed in federal bankruptcy court this year that named the same three financial institutions in connection with the ghost cattle scheme, suggesting a pattern of institutional failures that may have enabled the fraud to continue far longer than it should have.
The lawsuit is being handled by attorneys Mark Bryant, Emily Roark and David Bryant of Bryant Law Center; Ron Parry of Strauss Troy; and William F. McMurry of William F. McMurry and Associates.
The case underscores growing concerns about financial institution oversight of agricultural lending and investment schemes, particularly in rural communities where such operations may receive less regulatory scrutiny.