WA Rancher Asks for Sentencing Delay

LINCOLN, Neb. (DTN) -- A Washington state rancher who pleaded guilty to wire fraud has asked for another delay in his sentencing, telling a federal court he needs more time to continue to raise money to pay creditors in his ongoing Chapter 11 bankruptcy case.

Cody Allen Easterday could face up to 20 years in prison for defrauding Tyson Foods and another unnamed company of $244 million in costs for buying and feeding hundreds of thousands of cattle that didn't exist.

Easterday was scheduled for sentencing on Jan. 24 and has asked for a continuance for a third time to a date beyond April 28. A Jan. 6 hearing has been set on the motion in the U.S. District Court for the District of Eastern Washington in Spokane.

According to a declaration filed by Easterday's attorney, the now-former rancher has been working to sell off property in order to pay creditors. However, an agreement could not be reached by creditors on how to allocate the proceeds from those sales.

This has led to a lawsuit filed against Easterday, according to court records, which is set for trial beginning on April 28, 2022.

"Mr. Easterday does not seek to delay sentencing indefinitely and only desires to continue his good efforts to generate as much money as possible to reduce his restitution indebtedness," Easterday's attorney said in a declaration.

"The court should be advised that the resolution of this case occurred within an extraordinary quick time frame. The government first appeared in the investigation of this case in mid-January of 2021, and by March 31 the parties had negotiated and entered a guilty plea. Mr. Easterday has quickly accepted responsibility, is not seeking to delay sentencing for any other purpose other than to maximize asset value to reduce the amount of restitution owed."

The Easterday Farms property was sold to Farmland Reserve for $209 million after the company connected to the Church of Jesus Christ Latter-day Saints outbid an investment company tied to Microsoft founder Bill Gates.

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, according to court documents and the U.S. Department of Justice.

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

As part of the guilty plea, Easterday also agreed to repay $244 million in restitution, according to the DOJ.

The Commodity Futures Trading Corp. sued Easterday, alleging his company violated the Commodity Exchange Act and CFTC regulations.

The CFTC's complaint stated Easterday amassed more than $200 million in losses during a 10-year period trading cattle futures on both his personal and business accounts. Easterday then admitted in the fall of 2020 that he had caused Easterday Ranches to submit invoices for cattle that never existed to cover millions of dollars in those trading losses.

The CFTC complaint seeks restitution, civil penalties and permanent trading and registration bans on Easterday.

On several occasions, according to the CFTC complaint, Easterday carried positions in live cattle futures that exceeded CME exchange-set position limits and "materially overstated" cattle inventory, purchases and sales.

Tyson Fresh Meats sued Easterday Ranches at the end of January 2021, making the allegations.

After the Tyson lawsuit was filed, Easterday Ranches filed for Chapter 11 bankruptcy protection on Feb. 1, 2021.

According to the filing in the U.S. Bankruptcy Court for the District of Eastern Washington, Easterday lists liabilities and assets of $100 million to $500 million. The company said it has between 200 and 999 creditors, with Tyson Fresh Meats listed as the top creditor at $225 million.

Easterday Farms -- started in 1958 by Cody Easterday's grandparents -- also filed for Chapter 11 bankruptcy protection that same week in February 2021.

According to court documents, Cody Easterday used Easterday Ranches to enter into a series of agreements with Tyson and another company to purchase and feed cattle.

As part of the agreements, Tyson and the unnamed second company would provide funds for Easterday to buy and raise cattle.

After cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced and retaining as profit the amount by which the sale price exceeded the sum repaid to Tyson and the second company.

Read more on DTN:

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

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

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

Follow him on Twitter @DTNeeley

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