Tyson Sues Cattle Feeder Over 'Fraudulent Scheme'
Tyson Fresh Meats has filed a lawsuit in an attempt to recover losses from alleged false cattle sales and feed costs by a Washington cattle feeder. The suit was filed in Franklin County Superior Court in Pasco, WA.
Claiming losses of more than $225 million, Tyson is suing Easterday Ranches for recovery of assets and has asked for a court-appointed receiver to take control of Easterday Ranches. Court documents include a request for the current Easterday Ranches staff to turn over everything from keys to financial documents. Court documents also show Cody Easterday, president of Easterday Ranches, admitted to creating the scheme to make up more than $200 million in losses incurred in the commodities trading markets.
In late December, Tyson filed corrected financial results with the Securities and Exchange Commission for its beef segments for fiscal years 2017 through 2020. The report to the SEC – in Form 8-K – specified that Tyson was reporting “misappropriation of company funds” by one of its beef suppliers. The suit filed this week is the first time Easterday Ranches has been named.
“In an effort to ensure the orderly recovery of assets in the aftermath of a fraudulent scheme by Easterday Ranches, Tyson Fresh Meats is asking for a court-appointed receiver to take control of Easterday Ranches,” Tyson spokesman Gary Mickelson told Drovers in an email.
“During a recent company-led investigation, we learned Easterday falsified documents to obtain reimbursement by Tyson of more than $200 million in connection with some 200,000 cattle that did not exist. The president of Easterday Ranches admitted to the scheme and acknowledged the fraud was initiated to cover extensive commodities trading losses he had experienced,” Mickelson said.
The Easterday family’s livestock and farming operations includes, according to the company’s website, “more than 18,000 acres of potatoes, onions, corn and wheat. The grain products are used to feed cattle in the Easterday Ranches feedlots.” The feedlots have a capacity of about 70,000 head.
In a statement issued in December when it filed the 8-K, Tyson said an internal investigation with assistance of outside advisors, found “no evidence that the company benefitted from the supplier’s unlawful conduct or that anyone at the company took steps to alter financial statements to hide transactions resulting from the supplier’s unlawful acts.”
In the statement to Drovers, Mickelson said, “We are also working with our outside auditor to implement additional financial controls to help prevent or detect this type of activity in the future.”
Tyson operates six beef packing plants in the U.S., including one in Pasco, WA, that has a daily slaughter capacity of 2,300 head.
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