A Washington cattle rancher faces up to 20 years in prison after pleading guilty Wednesday to wire fraud for a $244 million scam against Tyson Foods Inc. of Springdale.
Cody Easterday agreed to pay restitution of more than $244 million to Tyson and another unnamed company. He faces sentencing in U.S. District Court, Eastern District of Washington on Aug. 4.
Easterday, president of Easterday Ranches Inc. of Pasco, Washington, had agreements to buy and raise cattle for the two companies' beef production. After the cattle were sold and slaughtered, Easterday would refund the money advanced to him by the companies but keep the profits from the cattle sale.
Prosecutors said that between 2016 and November 2020, Easterday filed false invoices for cattle that he neither bought nor raised. In fact, the cattle turned out to not even have existed.
In a December filing with the U.S. Securities & Exchange Commission, Tyson Foods said it discovered that it had overreported its beef inventory by $285 million because of the scheme. In January, the meat processor filed a $225 million lawsuit against Easterday and Easterday Ranches.
Another of Easterday's victims included CME Group Inc., which operates a derivative exchange. The government said Easterday defrauded CME with false paperwork to get exemptions for live cattle future contracts limits.
Tyson Foods, in its lawsuit, said Easterday admitted to the scheme to cover $200 million in losses in investments on the commodities market. The federal government said the same in the news release about Easterday's guilty plea.
"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. "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."