Oregon's departments of Agriculture and Environmental Quality have tapped the brakes on Easterday Ranches' permit application for a nearly 30,000-cow dairy on the site of the former Lost Valley Farm while legal issues swirling around the applicant are resolved, Farm Progress has confirmed.

The Pasco, Wash.-based farm and its owner, Cody Easterday, face civil and criminal repercussions after the rancher admitted to selling more than 200,000 non-existent head of cattle to Tyson Foods.

While Easterday's Confined Animal Feeding Operation (CAFO) permit request in Oregon is still under review, state officials announced a "pause" in "the process of gathering information and exploring options to verify the ongoing financial status of the applicant," said Andrea Cantu-Schomus, the ODA's communications director.

Related: Attorney: Easterday was ‘lured by the market’

The pause was discussed during the most recent advisory meeting on the project, Cantu-Schomus told Farm Progress in an email.

"As the Easterday family of businesses move through a variety of changes including bankruptcy and legal proceedings, the state in partnership with the Oregon Department of Justice continues to gather information about this rapidly evolving situation," she said.

She added that the state is continuing to gather information about the businesses, and "this includes work being done by the DOJ."

Activists pounce

The state's move has been seized upon by activist groups pushing for a moratorium on large commercial dairies in Oregon. Emma Newton, who organizes a coalition called Stand Up To Factory Farms, said it's "a relief" that the two agencies stopped work on the permit.

“Easterday’s failure to disclose fraud and major financial difficulties during the application process give ODA and DEQ ample grounds for the permit’s denial," Newton said in a statement. "Mega-dairies have no place in Oregon and the Easterday scandal is just further proof that the site’s former occupant, Lost Valley Farm, was not the only ‘bad actor’ among mega-dairies.

"ODA and DEQ have taken the first step," she said. "Now they must end this process and deny the Easterday Dairy permit once and for all.”

Related: Activists urge scrutiny on 'mega-dairies' amid lawsuit

The statement was emailed to Farm Progress by Food and Water Watch, a Washington, D.C.-based organization promoting public and corporate accountability.

The federal Commodity Futures Trading Commission is taking civil enforcement action against Easterday, alleging fraud in connection with the phony cattle sales and further accusing the rancher of making false statements to an exchange, and violating exchange-set position limits.

The civil action comes as the 49-year-old Easterday pleaded guilty March 31 in federal court of defrauding Tyson and another, unnamed company of more than $244 million in what prosecutors say was a scheme to cover his company's losses in commodities trading, according to the U.S. Justice Department.

He agreed to repay the sum and faces up to 20 years in prison, prosecutors said. Sentencing is set for August.

Animal welfare and environmental groups have used the scandal to try to derail Easterday's project on the former site of Lost Valley, a dairy shut down by Oregon authorities after more than 200 environmental violations.

[This story has been updated.]