Commodity Futures Trading Corp. lawsuit vs. former Eastern Washington rancher Cody Allen on Easter Day has been suspended in federal court, pending the outcome of his pending bankruptcy case.
Easterday pleaded guilty to defrauding Tyson Foods and another public company of $244 million in expenses for buying and feeding hundreds of thousands of cattle that did not exist.
Easterday has already been granted a stay of his criminal sentence by the U.S. District Court for the Eastern District of Washington until June 13. Easterday could face up to 20 years in prison. The court granted a stay from February 15 to May 10, 2022 at the earliest or the effective date of Easterday’s latest Chapter 11 bankruptcy plan.
The CFTC sued Easterday on March 31, 2021, alleging the breeder engaged in commodity fraud, made false statements to a registered entity, and exceeded position limits set by the exchange.
As part of a court consent order in December, Easterday is not only required to return Tyson, but was ordered to pay a civil penalty of $30 million.
The CFTC complaint said Easterday racked up more than $200 million in losses over a 10-year period trading livestock futures on his personal and business accounts. Easterday then admitted last fall that he tricked Easterday Ranches into submitting invoices for livestock that never existed to cover millions of dollars in those business losses.
The CFTC complaint seeks restitution, civil penalties, and permanent bans on trading and recording on Easter Day.
On several occasions, according to the CFTC complaint, Easterday featured positions in live cattle futures that exceeded position limits set by the CME exchange and “significantly overvalued” cattle stocks, buys and sells. .
Easterday operated Easterday Ranches and Easterday Farms, a large family farm in eastern Washington involved in feeding livestock 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, Mesa, Wash., submitted false and fraudulent invoices and other information to Tyson and another company, according to court documents and the US Department of Justice.
The owner of Easterday Ranches Inc. received reimbursement from the companies for allegedly buying and raising cattle that the company never purchased.
In June, a company linked to the Church of Latter-day Saints of Jesus Christ submitted a winning bid for $209 million for Easterday’s assets, according to court documents filed in federal bankruptcy court. The second highest bidder was an investment firm linked to Microsoft founder Bill Gates.
After the Tyson lawsuit was filed, Easterday Ranches filed for Chapter 11 bankruptcy on February 1, 2021.
According to the filing with the United States Bankruptcy Court for the Eastern District of Washington, Easterday lists liabilities and assets of $100 million to $500 million. The company said it has between 200 and 999 creditors, with Tyson Fresh Meats being the top creditor with $225 million.
Easterday Farms – started in 1958 by Cody Easterday’s grandparents – also filed for Chapter 11 bankruptcy protection the same week. Easterday Ranches filed with the court last week for permission to sell 22,500 acres of land.
Additionally, Easterday bought a struggling dairy in Morrow County, Oregon in 2019, housing more than 28,000 cows. The 7,228-acre dairy is not part of the bankruptcy.
Todd Neeley can be reached at firstname.lastname@example.org
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