Easterday Sentenced to 11 Years in Prison

Washington Rancher at Center of Cattle Scam Sentenced to 11 Years in Prison; $244M Restitution in Question

Todd Neeley
By  Todd Neeley , DTN Environmental Editor
Connect with Todd:
Former eastern Washington rancher Cody Allen Easterday was sentenced to 11 years in prison Tuesday. (DTN graphic by Nick Scalise)

LINCOLN, Neb. (DTN) -- Cody Allen Easterday was sentenced to 11 years in prison Tuesday following a guilty plea to one count of wire fraud after he admitted to charging Tyson Fresh Meats for feeding cattle that didn't exist.

As part of the plea agreement, the former eastern Washington rancher agreed to pay $244 million in restitution, including about $233 million to Tyson. Through Chapter 11 bankruptcy proceedings for Easterday Ranches, Easterday reportedly has paid nearly $70 million in restitution already. In addition, Easterday was sentenced to three years' supervised release.

Chief Judge Stanley A. Bastian in the U.S. District Court for the District of Eastern Washington kept the restitution amount agreed to in the sentencing, for now. However, the court will allow Easterday's attorneys to file motions as to potential offsets to reduce the amount.

During the weekend Easterday filed a motion asking the court to consider a number of offsets he claims, total at least $163 million.

Easterday contends his ranch was never paid by Tyson for certain feed and cattle-care services rendered, totaling about $12 million. In addition, Easterday alleges Tyson violated the Packers and Stockyards Act of 1921 by collecting more than $51 million in interest and guaranteed funds from Easterday Ranches.

In addition, Easterday argues along with Tyson his operation participated in a marketing venture utilizing "Cody's Beef" for seven to 11 years and was not compensated to the tune of at least $100 million.

Easterday attorneys had requested three years' probation as an alternative to prison time, arguing in court the former rancher has been undergoing treatment for a gambling addiction.

Attorneys argued Easterday's addiction led him to take chances in the cattle futures market, where he lost some $200 million. In attempt to cover the losses, according to court records, Easterday engaged in a four-year scheme to defraud Tyson to make up for the losses.

As part of the supervised release, Easterday will be required to complete a mental-health evaluation and follow any treatment recommendations.

In a pre-sentencing memorandum filed by Easterday's attorneys they said the rancher is sorry for his actions.

"Here, the court is sentencing an individual who has devoted his life to expanding a family business and helping countless employees, business associates, and members of the community over his life," the memo said.

"Mr. Easterday has substantial community ties and family support. Mr. Easterday's multitude of altruistic actions range from giving employees unexpected opportunities for advancement, to housing for employees in need, to assisting migrant workers obtain citizenship, and supporting every community event or need financially and by his own labor. Mr. Easterday is extremely remorseful with his conduct having destroyed Easterday Farms and the associated impact."

The Easterday Ranches saga drew national attention when a company connected to the Church of Jesus Christ Latter-day Saints was the winning bidder for the Easterday assets. The second-highest bidder was an investment company tied to Microsoft founder Bill Gates.

According to court documents in U.S. Bankruptcy Court for the District of Eastern Washington, Farmland Reserve was awarded the winning bid of $209 million for the Easterday assets.

Easterday operated an extensive family farm operation in eastern Washington involved in cattle feeding as well as 22,500 acres of potatoes, onions, corn, and wheat in the Columbia Basin.

Beginning in 2016 and continuing through November 2020, Easterday submitted false and fraudulent invoices and other information to Tyson and another company.

The Easterday Ranches Inc. owner received reimbursement from the companies for the purported purchase and raising of cattle the company never actually bought.

Read more DTN:

"WA Rancher Admits 'Ghost-Cattle' Scam," https://www.dtnpf.com/…

"Winning Bid on Easterday Assets: $209M," https://www.dtnpf.com/…

"Easterday Seeks Probation; US Says Jail," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

Todd Neeley

Todd Neeley
Connect with Todd: