Easterday selling off WA land worth millions before going to prison for ‘ghost cattle’ fraud

Sentencing for the former head of an Eastern Washington agriculture conglomerate has been delayed nearly four months while he continues to work through bankruptcy by offloading properties.

Cody A. Easterday, 50, had been scheduled to face a federal judge Tuesday for his wire fraud case.

But after a request from Easterday’s criminal defense attorney to postpone the hearing until at least mid-January, Chief Judge Stanley A. Bastian agreed to hold off on sending the bankrupt cattleman to prison.

Carl J. Oreskovich, in his motion filed in U.S. District Court, said the “continuation is based upon the need for Mr. Easterday’s continued participation in the Easterday Farm/Ranches bankruptcy and liquidation of properties.”

He added that the bankruptcy case is complex and requires Easterday’s constant assistance and cooperation so the liquidated assets can be surrendered and delivered before year’s end.

“Mr. Easterday, along with his mother and wife, have entered into a cooperation agreement with debtors and creditors in the bankruptcy, whereby their respective individual real property was combined with the bankruptcy estate’s property and sold for the purpose of providing proceeds to creditors,” Oreskovich wrote in his motion.

“It is in the best interest of all creditors to negotiate a settlement of the allocation of proceeds involved in the cooperation agreement and avoid litigation that will be extraordinarily costly and will merely deplete the assets available to creditors.”

The attorney said “a significant amount” of the bankruptcy estate’s property and Easterday individual property has been sold.

Federal prosecutors did not object to the motion, which was the second request for a delay.

Easterday now is set to be sentenced Jan. 24 in Richland’s Federal Building.

$244 million restitution

He faces up to 20 years in prison, and must repay $244 million in restitution.

The Mesa man has been out of custody since pleading guilty to the single felony count on March 31. He turned over his passport to probation officials.

Easterday was charged with the white-collar crime came after federal officials looked into business dealings between his family’s Franklin County-based cattle-feeding operation and Tyson Foods.

He was president and chief executive officer of Easterday Ranches when he concocted a scheme to defraud Tyson and another company out of more than $244 million to offset his losses in the commodities trading markets.

Tyson Foods and its subsidiary, Tyson Fresh Meats, have been named as victims in the fraud, along with the CME Group.

However, federal prosecutors continue to keep secret the name of the other victim, only identifying it as “Company 1” — a limited liability company with its principal office in Tukwila.

Tyson operates a meat processing plant in Wallula and has had longstanding agreements with Easterday Ranches, advancing the money for the costs of feeding and raising cattle to market weight before they are sent to slaughter.

Tyson was billed twice a month for reimbursement.

‘Ghost’ cattle scam

Easterday charged Tyson and the other company for buying and feeding 200,000 cattle that never existed. It has been dubbed a “ghost-cattle scam” by federal prosecutors.

The fraud happened over at least four years, though court documents show Easterday’s losses on the commodity market started 10 years ago.

Tyson sued the cattle supplier seeking to get its money back, along with 54,000 head of cattle that were on an Easterday feedlot north of Pasco.

Those are just two in a number of legal cases involving the family businesses since patriarch Gale Easterday died in December in a head-on crash on Interstate 182 after leaving the main office in Pasco.

Easterday Ranches and Easterday Farms, the farming side of the operation, filed separately for Chapter 11 bankruptcy protection in February.

Over the summer, Farmland Reserve Inc. — parent company of Kennewick-based AgriNorthwest — came in with the winning bid at $209 million for 18,000 acres of agricultural land in the southeast corner of Benton County. The sale included prime Columbia River water rights for 12,000 irrigated acres.

Agri Beef-affiliate Blue Tag Farms was the top bidder at $14 million for more than 600 pieces of equipment at Easterday farms and ranches, the Capital Press reported in September.

And Agri Beef paid $16 million for Easterday’s feedlot in Pasco, according to another Capital Press story.

A bankruptcy judge in September reportedly blocked an attempt by Tyson Fresh Meats to contest the sale for being too low.

This story was originally published October 5, 2021 at 1:32 PM with the headline "Easterday selling off WA land worth millions before going to prison for ‘ghost cattle’ fraud."