“Ghost Cattle” Scam Results in $244 Million Loss: No Bull
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GUEST BLOGGER
Mason Wilder, CFE
Senior Research Specialist
A recent case highlighted by the United States Department of Justice (DOJ) involved a $244 million loss incurred by major American meat company Tyson Foods and another unnamed organization with a peculiar commodity at the heart of the fraud scheme: ghost cattle. One might wonder how a company could have lost hundreds of millions of dollars due to bovines from the beyond; or maybe ask whether a ghost cow says “moo” or “boo” instead.
Disappointingly, the actual incident did not involve any scary dairies, Wagyu ghouls, or ice screams, but the consequences for the perpetrator could be quite corporeal: He’s facing up to 20 years in prison and will have to repay the entire $244 million of illicit proceeds after pleading guilty in federal court to one count of wire fraud.
Investigators discovered that rancher Cody Allen Easterday used his company, Easterday Ranches Inc., to defraud Tyson and the unnamed company by agreeing to accept funds in advance to purchase and feed cattle, eventually slaughter and sell them at market price, then repay the advanced costs plus interest and other costs. Unfortunately, for the victims of this scheme, they were paying for purchasing and growing hundreds of thousands of cattle that did not actually exist.
The ghost cattle scheme was not solved with the aid of any Brahman shaman; rather, agents with the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Postal Inspection Service investigated this paranormal pastoral plot.
Easterday kept the udder madness of his scheme going for approximately four years, submitting false and fraudulent invoices to Tyson and the unnamed company asking for reimbursement for costs associated with the purported purchases of cattle, as well as money spent raising them. In addition to being a rancher, Easterday was engaged in commodity futures trading, and used much of the proceeds of his fraud to cover trading losses, according to the DOJ.
The scheme’s exposure ultimately forced Easterday Farms and Easterday Ranches to file for Chapter 11 Bankruptcy, due of course to insufficient moolah in their bank accounts to cover debts to the aggrieved parties.
Whether or not Easterday eventually ends up in an inmate cattle call after sentencing in August 2021, his massive ghost cattle scheme will surely haunt the rest of his days.
