Agridime Settles Ponzi Scheme Case

OMAHA (DTN) -- Agridime LLC, a Texas-based online beef and cattle marketing company tied up in a court-ordered receivership, will be forced to pay nearly $103 million in restitution to customers who believed they were trading in cattle or cattle futures.

The Commodity Futures Trading Commission (CFTC) brought the case against Agridime and its owners last year and issued an order handed down last week by the U.S. District Court for the Northern District of Texas. Agridime and its owners agreed to a consent order handed down by the CFTC. The CFTC and Securities and Exchange Commission (SEC) each had alleged Agridime engaged in a Ponzi scheme by defrauding customers through soliciting investors to pay off other customers and investors.

The order includes a permanent injunction that bans Agridime from engaging in any contract or sale of commodities for interstate commerce. The order also requires Agridime to pay restitution of $102,936,904 that will follow rules set by the SEC action against Agridime with payments made by the company's court-appointed receiver.

The court order also entered default judgments against Agridime's co-founders, Joshua Link of Gilbert, Arizona, and Jed Wood of Fort Worth, Texas, requiring Link to pay $815,327.92 and Wood to pay $1.47 million. The CFTC said those disgorgements represent gains received by Link and Woods in violation of the CFTC complaint filed against Agridime in May 2024. Link and Wood reportedly founded Agridime in 2017. Attorneys for Link and Wood over the past year repeatedly filed requests for extensions to respond to allegations by the CFTC, but neither officially responded to the charges, leading to the default judgments against them.

Agridime went into a court-ordered receivership in late 2023 after the SEC accused the company of a $191 million Ponzi scheme. The SEC alleged Agridime fraudulently sold securities in cattle contracts.

Agridime had raised money from more than 2,100 investors in at least 15 states. When the SEC filed its case, Agridime had less than $1.5 million in cash and the SEC stated the company would implode unless it raised more money from new investors to pay off the older investors. At the time the SEC stepped in, Agridime had cattle contracts requiring them to pay investors more than $123 million in principal and another $24 million in profits.

Agridime was selling investment contracts related to buying and selling cattle, dubbed as "cattle contracts." Agridime promised investors guaranteed returns ranging from 15% to as high as 32%. Agridime claimed its program provided a way for investors to passively profit from owning cattle "without having to do all of the work."

Once put into court receivership, it became clear Agridime did not have the cattle or assets it claimed. Agridime claimed book value of more than $59 million in cattle spread over 18 feedyards in at least four states. The receiver's investigation, however, only found about 9,900 head of cattle -- and more than 2,000 of those were not actually owned by Agridime.

Agridime also had claimed it had more than $83.5 million in meat inventory before December 2023, but the audit determined the meat value was closer to $20 million.

On its website, Agridime stated the company "is an online cattle and agricultural products brokerage company that utilizes a proprietary trading platform to connect buyers and sellers." The website added, "We are registered with the USDA and bonded in accordance with the P&S (Packers and Stockyards) Act."

Agridime still operates a website that provides details on its receivership, but links for the company now go to American Grazed Beef LLC, a company that was created by the court receiver to sell off the remaining meat inventory.

Since last year, the court-appointed receiver has been in talks to sell Agridime and American Grazed Beef to a North Dakota investor group for $15.7 million. As part of that deal, a percentage of profits would go back to investor victims of Agridime. However, the North Dakota investor group did not close on the sale last month. The receiver on May 21 filed an update with the federal court now looking to wind down the operations of American Grazed Beef and sell off the assets of Agridime as well.

The CFTC consent agreement filed in the U.S. District Court for Northern Texas was signed by the court-appointed receiver, attorney Stephen Fahey, on the same day Fahey also filed an update that the sale of the company appeared to have fallen through.

DTN reached out to both Agridime and Fahey but did not receive an immediate response.

See, "CFTC Alleges Texas-Based Agridime Fraud Violated Commodity Exchange Act," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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