RICHLAND, Wash. — Cody Easterday will admit he committed civil violations while defrauding Tyson Fresh Meats and pay a $1 million fine, according to an order filed Friday, May 26, by the Commodity Futures Trading Commission.

If approved by U.S. District Judge Stanley Bastion in Richland, Washington, the order will settle allegations that Easterday submitted inflated cattle inventory figures in 2017 and 2018 to the Chicago Mercantile Exchange.

The false statements allowed Easterday to exceed the exchange’s limits on speculating on future cattle prices, according to the order.

The commission filed the civil charges in 2021 against Cody Easterday and Easterday Ranches as prosecutors brought criminal charges against Easterday, who procured and fed cattle for Tyson’s beef plant in Pasco.

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Easterday, 51, pleaded guilty to wire fraud and to billing Tyson for more than 265,000 head of cattle that didn’t exist. He is serving an 11-year term at a federal prison in Lompoc, California.

Easterday used the ill-gotten money from Tyson to cover losses totaling more than $200 million over 10 years in the cattle futures market, according to prosecutors.

At his sentencing in October in front of Bastion, Easterday blamed a gambling addiction.

The commission fined Easterday’s commodity broker, CHS Hedging of Minnesota, $6.5 million in December for inadequately supervising Easterday’s trading.

Easterday was identified in the order against CHS as “customer A,” but was identified in statements by members of the commodity commission.

CHS did not thoroughly investigate the source of the $147 million that Easterday deposited with the broker or seek to understand the purpose of his speculative trading, according to the order.

The speculative trading bore no relationship to Easterday’s business needs to hedge against changing cattle prices, according to the order. Under his cattle-feeding agreement with Tyson, Easterday risked losing money if cattle prices fell.

Easterday’s speculative trading at times generated margin calls of between $5 million and $8 million. Easterday always met the calls, and some payments exceeded his annual income, according to the order.

CHS risk managers asked Easterday in 2017 where he got the money. Easterday didn’t have a good explanation, but CHS did not follow up and made no more inquiries, according to the order.

“Customer A continued to regularly make seven-figure daily margin payments to cover losses from his speculative trading,” the order read.

The commodity commission in 2021 reached a $30 million settlement with Easterday Ranches. The settlement has no practical effect because the company was liquidated in bankruptcy court.

All other creditors, including Tyson, have priority over the commodity commission’s claim.

Easterday still owes Tyson $177.1 million in court-ordered restitution. Easterday has two lawsuits against Tyson, seeking to reduce his debt to the company.

Easterday claims Tyson reneged on a deal to share proceeds from selling “Cody’s Beef” in Japan. Another suit alleges unfair business practices by the meatpacker. Tyson denies the allegations in both lawsuits.