Beef Cattle Open Range on Large Ranch

To cover up massive derivatives trading losses, the owner of a U.S. feed yard allegedly defrauded a business associate in a scheme involving over 200,000 phantom head of cattle.

The U.S. Commodity Futures Trading Commission (CFTC) charged Easterday Ranches, Inc. and its co-owner and former president, Cody Easterday, for allegedly duping a slaughterhouse in a long-running scheme to cover more than US$200 million in derivatives trading losses that Easterday incurred over 10 years.

According to an enforcement action filed in U.S. District Court for the Eastern District of Washington, Easterday and his company defrauded an unnamed business out of more than US$233 million “by submitting… fabricated invoices” for the purchase and care of cattle that never existed.

The regulator said the scheme was hatched to cover millions of dollars of trading losses in the cattle and corn futures markets.

The allegations have not been proven.

The CFTC’s complaint seeks restitution, disgorgement, monetary penalties, and permanent trading and registration bans.