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Agridime and Its Co-Founders Charged by CFTC for $160M Ponzi Scheme Involving Purchase of Cattle

2024-05-15 Brokersview

The U.S. Commodity Futures Trading Commission (CFTC) announced that it has filed a civil enforcement action in the U.S. District Court for the Northern District of Texas against Agridime LLC, a Texas corporation, and its co-founders, Joshua Link of Gilbert, Arizona, and Jed Wood of Ft. Worth, Texas.

 

CFTC’s complaint alleges that the defendants operated a Ponzi scheme to defraud thousands of customers in at least 14 states by soliciting, accepting, and using customers' funds to pay undisclosed commissions and using later customers' funds to pay profits to prior customers, rather than for the purposes for which Agridime claimed the funds would be intended, i.e. in connection with contracts of sale of a commodity in interstate commerce (i.e., the customer’s purchase of cattle). 

 

Based on the information and facts available to the CFTC, from approximately 2021 through December 2023, the defendants received more than $161 million from over 2,000 customers.

 

Agridime operated an online platform that purportedly allowed customers to buy and sell cattle and pitched victims with the prospect of guaranteed annual rates of return between at least 15% and 20%. As advertised, Agridime’s cattle purchase program afforded customers the opportunity to buy and sell cattle without the actual day-to-day care of the cattle, or as Agridime stated in solicitation materials, purchasers of livestock would “make money raising cattle without having to do all the work.” 

 

In the Agridime cattle program, customers supposedly bought cattle, typically for $2,000 a head, and Agridime was to handle the feeding and care of the cattle, via farmers with whom Agridime partnered, until the cattle were ready to be processed and the beef sold. 

 

Agridime represented the customers’ funds would be used only for the purchase, raising, and feeding of the purchased cattle. Instead, because Agridime did not buy the number of cattle required to fulfill its obligations under the livestock contracts, Agridime had to use recent customers’ funds to pay the guaranteed profits of earlier customers. In addition, customers’ funds were also used to pay approximately $11 million in undisclosed commissions to Agridime personnel, including to Link, his wife, and Wood. 

 

In its continuing litigation against the defendants, the CFTC seeks restitution to defrauded customers, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

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