The Central Washington rancher at the center of a nearly $250 million fraud scheme involving cattle that didn’t exist was sentenced to 11 years in federal prison on Tuesday.
Cody Easterday, 51, pleaded guilty last year in a so-called “ghost cattle” scam that federal prosecutors called “one of the largest thefts in Washington history.” Easterday, who led a massive ranching firm, said a gambling addiction led him to forge invoices for roughly 265,000 cattle to Tyson Foods Inc., and another unnamed company, in an effort to cover expenses from losses sustained trading in commodity futures. His legal team requested a sentence that included three years of probation, including one year of home confinement, but no jail time.
Prosecutors, meanwhile, asked U.S. District Court Judge Stanley A. Bastian to sentence Easterday to between a decade and 12½ years in custody, citing the amount of the theft and that his admission of guilt came only after Tyson began investigating the missing cattle at the end of 2020.
Vanessa Waldref, U.S. Attorney for Eastern Washington, called the scheme “a massive, brazen and long-term fraud.”
“Here we really have a case where he’s gambling with the livelihood of his employees, the entirety of his multimillion-dollar ranching operation,” Waldref said in an interview Tuesday, after attending the sentencing hearing in Yakima. “This gambling is not going to the slots and having a problem at your own scale.”
Bastian sided with the government, handing down the 132-month sentence and ordering Easterday to repay $244 million.
Easterday Ranches entered into agreements with Tyson to buy cattle and raise them to the proper weight for slaughter. Easterday would then bill Tyson for the costs incurred raising the cattle. The federal government accused Easterday of wire fraud because invoices for repayment that included the nonexistent cattle were sent by email across state lines, in a scheme that lasted from 2016 to 2020.
Easterday’s attorney, Carl Oreskovich, said Bastian’s sentence “just, frankly, took our breath away.”
“The family is devastated. We were expecting something different. It’s a big loss,” Oreskovich said. Two courtrooms were filled with supporters, and several community members submitted letters to Bastian on Easterday’s behalf, calling him an altruistic member of the community who helped employees, including migrant workers.
Easterday’s defense asked the judge to reduce his sentence because the scheme was “not sophisticated” and not used “to finance a lavish lifestyle.”
Prosecutors, on the other hand, argued that Easterday stole more than what he lost trading on the market and questioned whether the diagnosis of gambling addiction was sound.
Companies belonging to the Easterday family have been involved in bankruptcy proceedings prompted by the fraud investigation, and Cody Easterday’s sentencing hearing had been delayed five times to accommodate the resolution of the complicated bankruptcy. Easterday agreed to a restitution amount of $244 million based on payments made to cover fraudulent invoices. The companies have provided close to $66 million in restitution to Tyson and other creditors, according to court documents.
Waldref credited the Fraud Section of the Justice Department in Washington, D.C., for assisting on the case, and Assistant U.S. Attorney Brian Donovan for helping navigate the bankruptcy proceedings and pushing for restitution. The case was also handled locally by Assistant U.S. Attorney Russell Smoot.
“This is a pretty extraordinary example of how fraud has devastating impacts on our community,” Waldref said, referencing the bankruptcy and tying the fraud to the rising cost of food at supermarkets.
Oreskovich said the bankruptcy proceedings haven’t been finalized, though the company’s assets have been liquidated and the courts must decide who receives what in compensation.
Easterday will be allowed to report to prison on his own. The terms of the plea agreement do not permit him to appeal the sentence based on its length, Oreskovich said.