LINCOLN, Neb. (DTN) -- Former eastern Washington rancher Cody Allen Easterday will be permanently banned from commodity trading and pay a $1 million fine to the Commodity Futures Trading Commission as part of a consent agreement filed in federal court.
Easterday is serving an 11-year prison sentence in California for pleading guilty to one count of wire fraud in a $246 million scheme that included billing Tyson Fresh Meats for feeding cattle that didn't exist. A federal judge ordered Easterday to make $244 million in restitution.
Easterday was sued by the CFTC on March 31, 2021, alleging the rancher committed commodities fraud, made false statements to a registered entity and exceeded exchange-set position limits.
In the consent order signed by Easterday and filed in the U.S. District Court for the District of Eastern Washington last week, the former rancher agreed to a permanent ban from trading.
The ban does not include the business entity Easterday Ranches.
"Defendant's violations of the act and regulations merit an award of restitution," the consent decree said.
"However, the court recognizes that in a related criminal action the court ordered that defendant pay restitution in the amount of $244,031,132 in connection with the same conduct at issue in this action. Accordingly, restitution is not ordered in this action."
The CFTC's original 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 he had caused Easterday Ranches to submit invoices for cattle that never existed to cover millions of dollars of those trading losses.
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.
Easterday operated Easterday Ranches and Easterday Farms, 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 growing cattle the company never actually bought.
In June 2021, a company connected to the Church of Jesus Christ Latter-day Saints submitted a winning $209 million bid for the Easterday assets, according to court documents filed in federal bankruptcy court. The second-highest bidder was an investment company tied to Microsoft founder Bill Gates.
After the Tyson lawsuit was filed, Easterday Ranches filed for Chapter 11 bankruptcy protection on Feb. 1, 2021.
Read more on DTN:
"Easterday Sentenced to 11 Years in Prison," https://www.dtnpf.com/…
"Mormon Church Group Outbids Bill Gates on Easterday Farm, Ranch Assets," https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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