- A rancher charged Tyson and another company $244 million to take care of cattle that didn’t exist.
- He pleaded guilty to the charges last year, which included sending fraudulent invoices.
- A district judge sentenced the Washington, D.C.-based rancher to 11 years in prison.
A rancher has been sentenced to 11 years in prison after being accused of charging Tyson Foods and another company $244 million to care for hundreds of thousands of cattle that did not exist.
The Justice Department said Cody Easterday, who owned Easterday Ranches in Pasco, Washington, defrauded companies for years.
Easterday Ranches had entered into agreements under which it would purchase and feed cattle and the two companies would advance the cost of these to it. Easterday would then pay those costs once the cattle are slaughtered and sold, the DOJ said.
Under the agreements with Tyson, first made in 2014, Easterday Ranches billed Tyson twice a month for the costs associated with raising the cattle to market weight until they were sent for slaughter at Tyson’s plant in Pasco, the DOJ said.
In similar agreements with the second company, which the Justice Department did not name, Easterday Ranches agreed to raise the cattle until they were ready for slaughter in exchange for the other company promoting it to buy capital and money to buy feed.
However, between 2016 and 2020, Easterday submitted “false and fraudulent invoices” for the purported cost of buying and feeding more than 265,000 cattle that his ranch did not purchase and “that did not actually exist,” the DOJ said.
That included sending false invoices to Tyson in May 2020, claiming payment of $5.3 million for about 6,300 head of cattle it had never purchased, the DOJ said.
In total, Tyson paid Easterday Ranches more than $233 million for the “ghost” cattle, and the other company paid $11 million.
According to the DOJ, Easterday used the proceeds of the fraud for his personal use and also to benefit his company, including covering approximately $200 million in commodity futures contracts for the losses he had incurred.
Easterday also defrauded CME Group by submitting false documents, the DOJ said.
Easterday was charged with wire fraud in March 2021 and pleaded guilty later that month, including paying the companies $244 million in restitution.
Chief Judge Stanley Bastian sentenced Easterday on Tuesday to 11 years in prison and said the case involved “the biggest theft or fraud I have seen in my career”.
The Press-Review quoted his lawyer, Carl Oreskovic, as saying the sentence “took our breath away.”
“We were expecting something different,” Oreskovich said.
As of 2020, Easterday Ranches had more than 22,000 acres of farmland, 150 employees, more than $250 million in revenue and even a private plane and hangar, according to the U.S. Attorney’s office for the Eastern District of Washington.
Easterday Ranches and another of its companies, Easterday Farms, filed for bankruptcy shortly after the fraud was revealed. Over the next 18 months, the companies and their assets — including real estate, farm equipment and aircraft — were liquidated, and Tyson and the other company were able to recoup about $65 million from the bankruptcy process.