Easterday Seeks Probation; US Says Jail
Prosecutors Seek Prison Time for Former Washington Rancher Easterday in 'Ghost-Cattle' Scam
LINCOLN, Neb. (DTN) -- Prosecutors are seeking 10 to 12.5 years in prison for former eastern Washington rancher Cody Allen Easterday after he pleaded guilty to a so-called "ghost-cattle" scam, according to pre-sentencing memorandums filed in court on Sept. 19.
Easterday's attorneys are pushing for three years' probation to include one year of in-house confinement.
Easterday is scheduled to be sentenced on Oct. 4 in the U.S. District Court for the District of Eastern Washington in connection with a scam that included charging Tyson Foods Inc. more than $230 million for cattle Easterday later admitted didn't exist.
Easterday pleaded guilty to wire fraud charges in the ghost-cattle scheme. Debtors, including Tyson Fresh Meats, presented a plan to liquidate the assets of Easterday Ranches and Easterday Farms in its Chapter 11 bankruptcy.
Attorneys for Easterday asked for probation to allow Easterday to continue therapy for a gambling addiction. As part of a plea agreement, Easterday is ordered to pay about $244 million in restitution.
Easterday's attorneys said he "became addicted to the gamble of the trade" during a five-year period and sustained about $200 million in losses.
"To meet his calls, Cody created and sent false cattle purchase invoices to Tyson Foods and utilized the proceeds to meet his market calls," his attorneys said in a memo.
"Notably, Cody kept a record of his fraudulent activity and in 2020 self-disclosed his fraud to Tyson officials," the attorneys said.
Attorneys said probation was appropriate because Easterday "did not commit fraud to finance a lavish lifestyle. Instead, he committed the fraud to cover commodity futures losses due to addiction."
Easterday's attorneys describe him as a "kind, humble man, treasured community member, friend, husband and father, who has been enormously successful in the agricultural and ranching industry."
Easterday offered several statements from former employees of his company, who talked about his generosity on a number of fronts.
US WANTS PRISON TIME
In addition to asking for a prison sentence, U.S. government attorneys told the court in a separate memo that Easterday should receive three years of supervised release.
"The sheer magnitude of the fraud that Easterday perpetrated is staggering," the U.S. said in the memo.
"Easterday stole nearly a quarter of a billion dollars over the four-year period from 2016 through November 2020. To put that figure in perspective, the $244 million that Easterday stole would have funded the city of Yakima's (Washington) entire police department for more than eight years."
U.S. attorneys acknowledge that Easterday has "taken responsibility for his actions," which includes raising money to pay creditors to the tune of about $70 million.
"Such good conduct confirms the defendant's fulsome acceptance of responsibility for his criminal conduct," the U.S. said in the memo.
"But such conduct does not excuse the more than four years of dishonesty and sheer magnitude of his fraud, and it is adequately addressed by the three-point reduction in offense conduct that Easterday is likely to receive for acceptance of responsibility."
In a Sept. 26 response memo to Easterday's request for no prison sentence, U.S. attorneys said his request for a "probation sentence for one of the largest thefts in Washington history should be rejected out of hand. In seeking such a slap on the wrist, Easterday asks the Court to completely ignore the magnitude of his theft."
TYSON VICTIM STATEMENT
Tyson offered a victim-impact statement, saying the company put its trust in Easterday.
"Cody Easterday violated that trust," Tyson said in the statement. "Tyson's loss of approximately $233 million does not include the significant amount Tyson spent on investigating and remediating the full nature and extent of the fraud, which conservatively exceeded $5 million."
The Commodity Futures Trading Commission sued Easterday as well, 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 last fall 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 sought restitution, civil penalties and permanent trading and registration bans on Easterday.
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 on DTN:
"Easterday Criminal Sentencing Moved," https://www.dtnpf.com/…
"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 firstname.lastname@example.org
Follow him on Twitter @DTNeeley
(c) Copyright 2022 DTN, LLC. All rights reserved.