Texas-Based Cattle Company Accused of $191 Million Investment Fraud
Agridime LLC, Texas-based cattle company, is facing allegations of orchestrating a cattle Ponzi scheme involving $191 million in investor funds and undisclosed sales commissions. The Securities and Exchange Commission (SEC) took swift action, issuing a temporary restraining order, asset freeze and receiver appointment for Agridime on Dec. 14.
The SEC's investigation revealed that the owners of Agridime, Josh Link of Gilbert, Ariz., and Jed Wood of Fort Worth, Texas, used millions in investor funds to make fraudulent payments and undisclosed sales commissions for themselves and others, reports a news source.
Eric Werner, director of the SEC’s Fort Worth regional office, emphasized that the defendants enticed investors with promises of lucrative returns in a statement claiming they could "make money raising cattle without having to do all the work."
A news source reports the company ran ads promising annual returns of between 15% and 32%, also saying, “We know it sounds too good to be true.”
The SEC's complaint, unsealed on Dec. 13 in the U.S. District Court for the Northern District of Texas, alleges that Agridime gathered over $191 million from more than 2,100 investors in 15 states. The company offered investments related to the supposed purchase of cattle, assuring investors that the funds would be used to buy, feed and raise cattle on a network of ranches.
However, the complaint explains that the defendants failed to fulfill their promises by not purchasing a sufficient number of cattle or generating enough revenue.
Beginning around December 2022, the defendants allegedly used at least $58 million to make payments to previous investors and over $11 million to pay undisclosed sales commissions to Wood, Link, Link’s wife and other sales representatives, says the complaint. Additionally, as of September, Agridime owed nearly $150 million to investors while having less than $1.5 million in the bank.
The SEC's complaint charges the defendants with violations of antifraud and registration provisions of federal securities laws. The SEC is seeking permanent injunctions, disgorgement, prejudgment interest, civil penalties, and officer and director bars against Link and Wood. A motions trial for the preliminary injunction is scheduled for Wednesday, December 20.
The SEC froze Agridime’s assets to prevent further defrauding of investors, revealing that the company continued selling cattle contracts in Arizona and North Dakota even after regulators in those states had instructed it to stop. A representative of Agridime declined to comment on the allegations.
