Rancher sentenced to 11 years in prison for $244 million 'ghost cattle' scheme
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A rancher in eastern Washington has been sentenced to 11 years in federal prison after bilking two companies out of $244 million over several years in a "ghost cattle" scheme, according to court documents.
Cody Allen Easterday, of Mesa, Wash., was convicted of defrauding multinational food producer Tyson Foods as well as a second unnamed company, the Justice Department said in a statement Tuesday.
Easterday charged the two companies for the costs of buying and feeding approximately 265,000 cattle that never existed. He entered a guilty plea in March in U.S. District Court of the District of Eastern Washington.
The 51-year-old's lawyers argued in late September for a sentence of three years probation and a year of house arrest.
Easterday used most of the fraudulent proceeds to cover about $200 million in losses incurred from commodity futures trading on behalf of one of his companies, Easterday Ranches.
"No one is above the law. Mr. Easterday amassed significant personal wealth, yet, he wanted more, so he defrauded his victims of nearly a quarter billion dollars by charging for cattle that never existed," U.S. Attorney Vanessa Waldref said in a statement.
"But for the combined and incredible efforts of our law enforcement team, today's sentence and the $244 million restitution award -- one of the largest in our District's history -- would not have been possible. Fraud has a debilitating impact on society by draining our communities' limited resources. Accordingly, we will continue to prosecute fraudsters to the fullest extent so we can keep our communities safe and strong in Washington State and throughout our great Nation."
After his arrest, Easterday Ranches and another of his companies, Easterday Farms, both filed for bankruptcy. Authorities have recovered about $65 million from liquidating their assets, which included large amounts of real property, heavy farm equipment, and aircraft. The money will be returned to the two victim companies.
Easterday's operation was uncovered by a joint investigation conducted by the Federal Deposit Insurance Corporation, Office of Inspector General, and the Postal Inspection Service' Criminal Investigations Group.
Prior to Tuesday's sentencing, Easterday filed a motion seeking amendments to the overall amount of restitution he owed Tyson and the second company. In the court documents filed this past weekend in U.S. District Court, Easterday stated Tyson continues to owe him more than $160 million in offsets.
"Tyson utilized Mr. Easterday's name and likeness for a branded beef product sold in Japan, in turn agreeing to compensate Mr. Easterday," Easterday said in his motion.