The Securities and Exchange Commission (SEC) has taken legal action against Agridime LLC, a Fort Worth, TX-based company, accusing the entity of running a Ponzi scheme that garnered at least $191 million through bogus cattle contracts.
The unsealed complaint, filed in the U.S. District Court for the Northern District of Texas, names Agridime owners Josh Link and Jed Wood as defendants. Link, co-owner and executive director, and Wood, co-owner and operations director, founded the company in 2017 and own a 45.5% interest in the company.
According to the company’s LinkedIn page, Agridime LLC specializes in retail meat sales with farm-to-table products, wholesale meat distribution and live animal supply chain management. It also states, “We offer customers the ability to own cattle in our beef supply chains.”
The SEC complaint outlined that Agridime’s cattle contracts involved selling calves to investors at $2,000 each, promising to repurchase them at a higher price after a year, ensuring a guaranteed investment return. Starting in August 2023, Agridime introduced a new cattle contract offering investments in bred cows at $4,500 per head. In this arrangement, the cows were to stay on Agridime-operated ranches until they calved and the investor didn’t assume control of the cattle.
The SEC alleges the company sold cattle contracts to over 2,100 investors in 15 states since January 2021, promising annual returns ranging from 15-32% to investors who could passively profit from ownership.
“The defendants enticed investors with guarantees that they could ‘make money raising cattle without having to do all the work,’ but as we allege in our complaint, their promises of annual returns of 15‑32 percent were, in the defendants’ own words, ‘too good to be true,’” said Eric Werner, director of the SEC’s Fort Worth Regional Office.
The defendants are accused of diverting $58 million of investor dollars to make Ponzi payments instead of using it to purchase, feed and process cattle. The SEC said Link and Wood did not purchase enough cattle to fulfill the company’s obligations, resulting in only being able to “return principal and pay promised returns by making Ponzi payments.” The complaint continues the company did not disclose to customers that they were paying 10% sales commissions to salespeople, including Link and Wood, totaling $11 million.
As of September 2023, the company had outstanding cattle contracts requiring over $123 million in principal payments and approximately $24 million in guaranteed profits.
“Given the company’s cash balances of less than $1.5 million as of September 30, 2023, and insufficient operating revenues, it appears that Agridime’s Ponzi scheme will soon implode unless it continues to raise money from new investor-victims,” the complaint read.
The SEC obtained a temporary restraining order, froze assets, appointed a receiver and other emergency relief measures to halt the Ponzi scheme. The regulatory agency has charged the defendants with violating antifraud and registration provisions of federal securities laws. It seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, civil penalties and officer and director bars against Link and Wood.
A court hearing was scheduled for Dec. 20 and the SEC’s investigation will continue with enforcement staff in its Fort Worth and Atlanta regional offices.
According to Agridime’s website, Steve Fahey has been appointed receiver. He will seek information from all affected investors and creditors, providing updates on the progress of the investigation on the company’s website at agridime.com. Fahey can be emailed at steve.fahey@kirkland.com. Alternatively, you may leave a message for him at 972-571-1340.
Agridime’s legal troubles extend beyond the SEC complaint. In April 2023, the Arizona Corporation Commission barred the company from selling cattle contracts and the North Dakota Securities Commission issued a cease and desist order a month later. Agridime is alleged to have violated these orders, with sales representatives selling over $1 million in cattle contracts in Arizona and $9 million in North Dakota since their issuance. — Charles Wallace, WLJ contributing editor
