A Mesa man faces a lengthy prison sentence after pleading guilty to defrauding Tyson Foods Inc. and CME Group Inc. of more than $244 million through a stunning “ghost-cattle” scheme to cover his massive trading losses.

Cody Easterday, 49, former president of Easterday Ranches in Franklin County, pleaded guilty to a single count of wire fraud and agreed to repay more than $244 million. He faces a sentence of up to 20 years when he is sentenced Aug. 4.

The U.S. Department of Justice announced the guilty plea on March 31 following a series of revelations outlined in state and federal court documents and by federal investigators.

The scheme was investigated by the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Postal Inspection Services. It was prosecuted by the assistant U.S. attorney for the Eastern District of Washington.

According to court documents and the Department of Justice, Easterday Ranches entered an agreement with Tyson to purchase and feed livestock for eventual slaughter at its Wallula beef plant in Walla Walla County in early 2017.

Under the deal, Tyson reimbursed Easterday for the costs related to purchasing and feeding the animals.

Tyson (NYSE: TSN), one of the world’s largest food companies with more than $43 billion in annual sales, discovered errors in its inventory records in late 2020.

Its investigation determined 200,000 cattle on the books did not exist. Easterday admitted the scheme to Tyson representatives and claimed it was to cover commodities trading losses, according to the $225 million lawsuit Tyson filed in January in Franklin County Superior Court.

According to the DOJ, Easterday used the proceeds for his own benefit, for the benefit of Easterday Ranches, and to cover $200 million in commodity futures contracts trading losses he had incurred.

Tyson acknowledged the situation without mentioning Easterday by name in notes to its fourth quarter earnings report in January. It called the misappropriation of company funds an isolated incident and noted it had issued corrections to its prior statements.

The second victim is CME Group Inc., which operates a financial derivatives exchange. According to the DOJ, Easterday submitted falsified paperwork on two occasions leading CME to exempt Easterday Ranches from certain restrictions on live cattle futures contracts.

“For years, Cody Easterday perpetuated a fraud scheme on a massive scale, increasing the cost of producing food for American families,” said Nicholas McQuaid, acting assistant attorney general for the DOJ.

Cody Easterday, together with Debby Easterday and Karen Easterday, resigned as officers of Easterday Ranches Inc., the company they owned, and placed it under the control of Paladin Management Group LLC, a Nevada restructuring firm.

Paladin was tasked with restructuring the businesses. Easterday Ranches and a related company, Easterday Farms, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code after Paladin took control.

The bankruptcy cases are pending before U.S. Bankruptcy Judge Whitman L. Holt of the Eastern District of Washington.