Easterday Pleads Guilty To Defrauding Tyson
Cody Easterday, Mesa, Washington, pleaded guilty Wednesday in federal court to defrauding Tyson Foods Inc. and another company out of more than $244 million by charging them for the costs of buying and feeding as many as 200,000 cattle that did not exist.
The U.S. Department of Justice (DOJ) said Easterday, 49, pleaded guilty to one count of wire fraud and agreed to repay $244,031,132 in restitution. He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison but likely will see much less prison time based on federal sentencing guidelines.
The ghost-herd scenario has led to several lawsuits and bankruptcies by Easterday Ranches Inc. and Easterday Farms.
The scheme was discovered by Tyson, which filed corrected financial results with the Securities and Exchange Commission in late December for fiscal years 2017 through 2020. Tyson later sued Easterday Ranches for recovery of assets after a company-led investigation revelaing Easterday falsified documents to obtain reimbursement by Tyson of more than $200 million in connection with some 200,000 cattle that did not exist.
Tyson spokesman Gary Michelson said in January that Easterday “…admitted to the scheme and acknowledged the fraud was initiated to cover extensive commodities trading losses he had experienced.”
In connection with his commodity futures trading, Easterday also defrauded the CME Group Inc. (CME) when, on two separate occasions, Easterday submitted falsified paperwork to the CME that resulted in the CME exempting Easterday Ranches from otherwise-applicable position limits in live cattle futures contracts, the DOJ added.
“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 DOJ’s Criminal Division. “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.”