On Wednesday, Cody Allen Easterday pleaded guilty to a “ghost-cattle scam.” According to the Department of Justice (DOJ) press release, through his company, Easterday Ranches Inc., Easterday defrauded two meat companies, including Tyson Foods Inc., which collectively paid him over $244 million to purchase and feed cattle under an agreement, however, he reportedly did not use the funds for their intended purpose.
The DOJ explained that between 2016 and 2020 Easterday contracted with the companies to purchase and feed cattle on behalf of the companies, using advances. He agreed to repay the advanced cost to Tyson and the other company after the cattle were slaughtered and sold. Allegedly, he submitted “false and fraudulent invoices and other information” and was reimbursed for purchasing “hundreds of thousands of cattle” that did not actually exist.
“For years, Cody Easterday perpetrated a fraud scheme on a massive scale, increasing the cost of producing food for American families,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division in the press release. “The Criminal Division’s prosecutors are committed to swiftly and thoroughly prosecuting frauds affecting our nation’s agricultural and other commodities markets, whether in the heartland or on Wall Street.”
Easterday reportedly used the funds he received for his personal benefit and to cover losses. His actions were discovered by the U.S. Postal Inspection Service and various law enforcement groups. Easterday agreed to repay the funds and could face up to 20 years in prison, which will be determined on August 4.
Tyson filed a lawsuit against Easterday Ranches in January seeking an injunction from a Washington state court, but the proceedings were stayed in February following a petition for bankruptcy filed by the defendant in the Washington Eastern Bankruptcy Court.
Additionally, a lawsuit was filed against Cody Easterday and his company on Wednesday by the Commodity Futures Training Commission for violations of the Commodity Exchange Act and regulations of the commission. That complaint explained that Easterday had admitted that he was involved in the fraud in November 2020, when presented with evidence, before his guilty plea to the Department of Justice.
Allegedly, Easterday participated in the scheme “to cover losses he incurred engaging in speculative trading in the cattle and corn futures markets,” which he had done for over 10 years and resulted in more than $200 million in losses. The Commodity Futures Training Commission explained that the producers relied on the fraudulent invoices because they had been in a long business relationship.
