Washington state cattle rancher Cody Easterday has been permanently barred from trading commodity futures after admitting to a massive fraud scheme involving phantom cattle. Chief Judge Stanley A. Bastian of the U.S. District Court for the Eastern District of Washington issued an order requiring Easterday to pay a $1 million civil monetary penalty.
This ruling comes in addition to an 11-year prison sentence and $244 million in restitution already levied against Easterday in a parallel criminal case (United States v. Easterday, No. 21-cr-6012-SAB). The CFTC initiated its investigation in March 2021, alleging that Easterday and his company, Easterday Ranches, Inc., sold over 200,000 head of cattle that never existed to a major beef processor.
The scheme, lasting from approximately October 2016 to November 2020, involved submitting fraudulent invoices and reimbursement requests, allowing Easterday Ranches to illegally obtain more than $233 million. Easterday also falsified information reported to the Chicago Mercantile Exchange in applications for hedge exemptions, allowing him to bypass position limits on live and feeder cattle futures markets.
“There’s a saying about people who pretend to be something they’re not: they’re ‘all hat and no cattle.’ That perfectly describes Easterday,” said Ian McGinley, Director of Enforcement at the CFTC. “Easterday cheated his best customer by lying about non-existent cattle, lied to an exchange, and broke exchange rules.”
The court order permanently enjoins Easterday from violating the Commodity Exchange Act and CFTC regulations. He is also prohibited from trading through any CFTC-registered entity and from engaging in any activity requiring CFTC registration. A consent order was previously entered against Easterday Ranches, Inc. in December 2021.
The case was led by CFTC staff members Ben Sedrish, Joseph Patrick, Ashley Burden, Allison V. Passman, Margaret Aisenbrey, William Janulis, Scott Williamson, and Robert T. Howell.
The CFTC encourages individuals with information regarding potential commodity trading violations to report them via the toll-free hotline at 866-FON-CFTC, or through the agency’s online tip/complaint portal.
Source: CFTC.gov
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