Farmland Reserve Inc., a Utah-based nonprofit related to the Church of Jesus Christ of Latter-day Saints, was the winning bidder at a June 17 bankruptcy auction for the 22,500-acre collection of Benton County farms owned by Easterday Ranches Inc. and Easterday Farms. "If Tyson owned the cattle during their time spent in the Easterday feedlot, this implies that Tyson was indirectly paying Mr. Easterday an anticompetitive suppressed price for feeding cattle for Tyson, and that price was anticompetitive due to Tyson's exertion of monopsony market power," the lawsuit said. Betting the ranch | The Counter Tyson says it's paying for feed for cattle that don't exist, Activists urge scrutiny on 'mega-dairies' amid lawsuit. Plus piles and piles of land and land leases totaling 22,500 acres, 12,100 of them irrigated. He disputed that he had been stealing, called the phony invoices "forward billing" instead. Called FLCs for short, the companies Rangeview Ag Labor and Labor Plus Solutions hire the migrant and local laborers who work the fields, most of whom come from the Latinx community. The Department of Justice reports that the companies charged Easterday Farms under various agreements for the purported costs of purchasing and feeding of hundreds-of-thousands of cattle that did not exist. And that case, like others nowadays, happened on paper, not on the range. Copyright 2023. Tyson supported the sale to Farmland, which operates in Washington as AgriNorthwest, but says it was blindsided by the pre-bankruptcy sale of North Lot. Some people play this system quite well. Cody Easterday walks with his wife, Debby, from the Federal Courthouse on South Third Street after being sentenced to 11 years in prison, on Tuesday, October 4, 2022, in Yakima. The udders of several mother cows on a Red Bluff, Texas ranch were engorged with milk, because their calves had been stolen. But personal predilection this was not, not entirely. "For years, Cody Easterday perpetrated a fraud scheme on a massive scale, increasing the cost of producing food for American families," Acting Assistant Attorney General Nicholas L. McQuaid said in a news release. And we're sitting here going, 'We can't pencil that, that doesn't work.'". Grow your production, efficiencies, and profitability. Extensive agricultural building situation, as well as a separate 1-2 family dwelling. A Washington man pleaded guilty today to defrauding Tyson Foods Inc. (Tyson) and another company (Company 1) out of more than $244 million by charging them under various agreements for the purported costs of purchasing and feeding hundreds of thousands of cattle that did not actually exist. Others also demurred, a verbal shrug, as if the shock of losing the money was less than the shock of losing an institution like Easterday Farms. Longtime Franklin cattle ranches sued for bilking $225M from Tyson Bill Gates and Mormon Church to vie for Easterday farmland and Postal Inspection Service for their dedication to investigating this case and tenacity in ferreting out the fraudulent activity to which the defendant has pleaded guilty, said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington. All rights reserved. US cattle feeder pleads guilty to $244 million "ghost cattle" fraud Two years later, he's serving a federal sentence of eleven years. Over the following year and a half, Easterday's companies and their assets, including large amounts of real . A federal district court judge will determine any sentence after considering the U.S. They spend a lot of time sending inspectors out to check on whether or not the cattle they have loaned money on really exist.. He carried out the whole scam with fake invoices and paper over years. Police records show as much. But what's certainly true is that the price of a steak is increasingly untethered from the cost of raising cattle. BASIN CITY - Easterday Farms is suing the former owners of an Oregon mega dairy it purchased several years ago in hopes of getting out of its ownership agreement. of making false statements to an exchange, and violating exchange-set position limits. And maybe business with the Easterdays would be good again with the cousins or siblings or sons who remained. And the ranches' investments had been wiped out entirely. Good Stuff NW - Tag: Cody Easterday Easterday bankruptcy divides millions among dozens. What some - AOL Tyson paid the tab, and Easterday used Tyson's money to pay down his trading debts. In the months after pleading guilty to wire fraud, Easterday raised tens of millions of dollars through asset sales in an attempt to make restitution to Tyson. In a capitalist system, failure like this is felt hardest by the people with the least protection. Subscribe to receive top agriculture news, Be informed daily with these free e-newsletters. Farm Progress is part of the Informa Markets Division of Informa PLC. AFTER TYSON REPORTED Cody Easterday's fraud, federal investigators swooped in for their own examination, referring to the situation in shorthand as the "Ghost-Cattle Scam," while ranchers called it "Cattlegate." Or. Several Easterday farms in the Columbia Basin have been sold through bankruptcy court for $209 million to Farmland Reserve Inc., owned by The Church of Jesus Christ of Latter-day Saints. He often ran errands there, or stopped to chat with the dozens of mechanics employed to tinker with the part of the business he loved best: the farm machines. Tyson employees, shocked by his stoicism and cool demeanor, checked his math by flying drones over the ranch to count the cattle. In recent months Easterday also sued Tyson for alleged breach of contract for money the company owed to him. Tyson passed on providing an interview or any comment on Easterdays incarceration. "You don't get paid, you move on," said Brad Curtis, whose farm was owed $112,000 for feed. How the scheme worked Tyson would pay premiums for beef quality, and discounts for deficiencies. All other trademarks are the properties of their respective owners. He said he was shopping a settlement agreement to avoid the years of litigation that could erupt in a fight for what was left. In addition, court documents show Farm Reserve promised an additional $5 million to Easterday debtors to offset the costs of the Chapter 11. Easterday also was required to assume "all of the financial risk" of operation. But while it is indeed an anomaly an expansive hoodwinking far from normal by ranching standards it exposed a problem widespread in the beef business, which is that the price of a steak has increasingly little to do with the cost of fattening a steer. Though the company hired a quarter of Easterday Farms' staff and rebooted many of their family's contracts in the community, the transition to investor ownership could mean fewer donations to the county fairs, local Republican candidates and other causes the Easterdays championed. Farmland Reserve is operated by the Mormon Church. He reasoned that if money was left over, much of it would probably be eaten up by attorneys. The criminal case and connected Chapter 11 bankruptcy of Easterday Ranches Inc. and Easterday Farms could lead to the liquidation of an extensive family farm operation in eastern Washington involved in cattle feeding, as well as having 22,500 acres of potatoes, onions, corn and wheat in the Columbia Basin. And we're sitting here going, 'We can't pencil that, that doesn't work.'" Cody was frequently at top efficiency, and Gale was often toting Cody's three boys in his pickup, the next generation in training. In recent testimony to Congress about Western drought, which was so severe in 2021 that irrigation water was scarce, several ranchers described selling off herds at significant losses, unable to buy hay while grass wouldn't grow and profits were too slim to afford it. Tyson Audit - AG INFORMATION NETWORK OF THE WEST Once the cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced (plus interest and certain other costs), retaining as profit the amount by which the sale price exceeded the sum repaid to Tyson and Company 1. (DTN) -- A company connected to the Church of Jesus Christ Latter-day Saints was the winning bidder for the assets of southeast Washington rancher Cody Easterday, according to court documents filed in federal bankruptcy court. Beginning in approximately 2016 and continuing through November 2020, Easterday submitted and caused others to submit false and fraudulent invoices and other information to Tyson and Company 1. Tyson accounted for about 80% to 85% of the fed cattle purchased in the Pacific Northwest from 2006 to 2020, the lawsuit said. If the price was bad, he was stuck for the loss. For the next two years, he was in a nasty cycle, billing Tyson for imaginary cattle, then paying down the losses and trading again. A lawsuit filed in Franklin County this week by Tyson Foods. That's it. Hundreds of thousands of them were never real. From steer wrestling to barrel races, they were fixtures in arena box seats and in the community, too. As part of his defense, Easterday also admitted to having a gambling habit in court documents where he lost millions of dollars on the beef futures market. Tyson continued with its own investigation, dispatching the corporate honchos to debrief Easterday in a pair of meetings in which he detailed how he'd scammed them, sharing meticulous notes on the cattle, even the imaginary ones. Easterday carried out one of the largest cattle swindles in U.S. history, from near Pasco, in Washington state. That circumstance requires ranchers to shoulder tremendous financial risks. Profits for ranchers have trended slimmer almost every year since the late 1980s, when those prices were first tracked. The plane used to be owned by Easterday Farms, but now a LLC called Fly Lo out of North Carolina, owns the craft. It's also why the beef business is consolidating among ranchers like the Easterdays, who instead of raising a few hundred head of cattle on rangeland, raised them by the tens of thousands in feedlots. Tyson says Easterday supplied about 2% of the company's beef over the last four years. Tyson did not respond to DTN's request for comment. According to court documents in the criminal case, beginning in 2016 and continuing through November 2020, Easterday submitted false and fraudulent invoices and other information to Tyson and another company. Not all features of DTN / The Progressive Farmer may function as expected. Number 8860726. In a brightly colored dormitory there one day, he described through a translator how, in early spring, workers begin at 3 in the morning, ground lit by headlamps, to race the rising sun while picking asparagus. Nothing illegal. State troopers had the grim task of contacting his family and puzzling over the scene. Registered in England and Wales. CODY EASTERDAY MUST HAVE FACED colossal pressure. And another $30,249.72 in cash was spent for things like trips to Costco and plants. [volume] (Washington [D.C.]) 1902-1939, October 09, 1903, Page 9, Image 9, brought to you by Library of Congress, Washington, DC, and the National Digital Newspaper Program. The civil action comes as the 49-year-old Easterday pleaded guilty March 31in federal court of defrauding Tysonof more than $244 million in what prosecutors say was a scheme to cover his company's losses in commodities trading, the Spokane Spokesman-Review reported. The old adage is if it doesnt sound right or feel right, its probably not right.. The second-highest bidder was an investment company tied to Microsoft founder Bill Gates. Plus, he owed 4% interest on that money. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. In the interim, because the coronavirus had bottlenecked beef processing and prices for consumers had spiked, pay for ranchers had fallen to an historic low of 31.1% before rebounding to 35.8% by June. Increased demand. It's the workers that earn the least that are at risk to be hardest hit: the seasonal, often undocumented, laborers employed by farms, who are paid piecemeal through third parties for tasks far from the looping highways and bridges of the Tri-Cities, out in the land of irrigation pivots and row crops. That Western grit and independence? More time: Judge postpones Easterday sentencing another six months She tweets infrequently @lvdvoo. MESA, Wash. A Washington man pleaded guilty on Wednesday, March 31, to defrauding businesses out of more than $244 million by charging them under various agreements for the . Easterday, 49, faces up to 20 years in prison. And Easterday, who was 79, had been making his usual rounds in an industrial part of Pasco, Washington. As of Dec. 25, 2020, Tyson's net worth was $23.59 billion, so it comes as no surprise that the company reported that the loss caused by Easterday Farms . 21-00141-11 (Bankr. Easterday | Northwest News Network According to court documents, Cody Easterday used Easterday Ranches to enter into a series of agreements with Tyson and another company to purchase and feed cattle. On March 24, the Department of Justice charged Cody Easterday with a single count of wire fraud for sending the fake invoices to Tyson over email. JDK-8141210 : Very slow loading of JavaScript file with recent JDK "This bottleneck, created by defendant, provides Tyson with significant market power, which it wielded in negotiation of pricing and other terms with feedlot operators. A federal district court judge will determine any sentence after considering the U.S. For an FLC, that is a huge hit.". He even put radio frequency trackers under the skin of the bait cows. Court records explained much of the rest. Even as the government comes for the rest of what is his through bankruptcy court, Cody Easterday's still a fixture in the box seats at the rodeo. Monopsony is a market situation in which there is only one buyer. And cattle change hands three or four times in their lifespan. Eastern Washington rancher sentenced for 'ghost cattle' fraud Cody Easterday was sentenced to 11 years in prison for what U.S. District Court Judge Stanley Bastian called "the biggest theft or. Down the hill, a row of farm machines lined a field that sloped skyward to meet the blue day. The Seattle Times reported last month that an audit done by the Washington State Department of Agriculture of brand inspection records found no discrepancies. Its likely that Easterday flew down to California in a private jet. The Church of Jesus Christ of Latter-day Saints, commonly referred to as the Mormon Church, responded Tuesday to a whistleblower complaint that accuses the church of stockpiling $100 billion in . But it's unclear whether the dairy a hoped-for venture that's all that's left of the Easterday empire will ever start up. He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison. "DTN" and the degree symbol logo are trademarks of DTN. Easterday Farms has now grown to more than 18,000 acres of potatoes, onions, corn and wheat. The Federal Deposit Insurance Corporation Office of Inspector General and the U.S. Williamson says some rustlers start out with a small theft that just keeps growing. The complaint alleges that, from at least October 2016 to November 2020, Easterday Ranches submittedfalse invoices and reimbursement requests relating to more than 200,000 head of cattle that the Central Washington farmnever actually purchased or raised on the producers behalf. The original print version of this article was headlined "Betting the Ranch". That rancher might buy a futures contract for $1.34, looking to make a profit of 4 cents. But this capitalistic pursuit scale is a primary reason why so many ranchers are going out of business, especially when drought and the high price of hay add other pressures. He ascended the exit ramp, past signs that warned "wrong way," and rounded the bend onto the interstate, colliding with a vehicle driven by his own delivery man. In addition, Easterday purchased a troubled dairy in Morrow County, Oregon, in 2019, housing more than 28,000 cows. Click here to read more coverage about Easterday Ranches: https://www.dtnpf.com/, Todd Neeley can be reached at todd.neeley@dtn.com. That rangeland? A multinational monolith, Tyson produced one out of every five pounds of chicken, beef and pork in the United States and made $43.2 billion in sales every year. Easterday Farms files for bankruptcy week after Easterday Ranches The family registered a new business in Oregon, called Easterday Dairy LLC, which is now seeking state approval to reopen . Usual earnings are around $300 a day. Inside this system, Easterday was playing an impossible game. Around the spring 2010 after the feedlot expansion was complete, the lawsuit said a company representative "informed Mr. Easterday that Tyson wanted to change the terms of their longstanding arrangement and that Tyson no longer wanted to own and feed cattle under the existing 50/50 arrangement, which was the agreement Mr. Easterday relied upon in deciding to expand his feedlot capacity.". He's always on the run.". Those heavyweights were secured by contracts or collateral, something other than friendship.