‘Too good to be true’: Fort Worth cattle sales part of alleged $191M Ponzi scheme, SEC says

A Fort Worth company has been ordered to stop an alleged $191 million Ponzi scheme by the Security and Exchange Commission for selling cattle contracts to more than 2,100 investors with the promise of annual returns ranging from 15% to 32%.

Fort Worth-based Agridime LLC owners Josh Link, of Gilbert, Arizona, and Jed Wood, of Fort Worth, are named as defendants on the complaint the SEC filed Dec. 11, 2023, in the U.S. District Court for the Northern District of Texas and unsealed on Wednesday, according to the SEC. The complaint alleges that the defendants diverted millions of dollars of investor money to make Ponzi payments and to pay undisclosed sales commissions to themselves and others.

“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.

Agridime told the Star-Telegram in a phone call it did not have a comment at this time.

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The SEC complaint alleges that the defendants have raised at least $191 million since 2021 from more than 2,100 investors in at least 15 states by offering and selling investments related to the supposed purchase and sale of cattle. They promised investors guaranteed annual returns and marketed the cattle contracts on their website as a way for investors to passively profit from cattle ownership “without having to do all the work.”

Link and Wood told investors that Agridime would use their money to acquire feed and raise cattle on its network of ranches, and investors would help provide “fellow Americans with the highest quality farm fresh beef available.” However, as alleged in the complaint, the defendants did not purchase nearly enough cattle or generate sufficient revenues from cattle operations to deliver the promised returns.

Since December 2022, the SEC complaint says, Agridime has used at least $58 million (that they said would be used to purchase, feed and process cattle) from unsuspecting investors to make payments to others who had invested earlier, then used more than $11 million to pay themselves commissions. That includes $5.6 million to a salesperson and $1.3 million each to Link and Wood.

The SEC obtained a temporary restraining order, asset freeze, the appointment of a receiver and other emergency relief to halt the ponzi scheme.

What is Fort Worth-based Agridime?

Agridime, running out of WestBend in Fort Worth, says it partners with farms and ranches to allow consumers to purchase their meat products directly from the farm.

Agridime says it specializes in retail meat sales, wholesale meat distribution and live animal supply chain management. The meat is sourced from local farms in the United States, USDA inspected and certified for resale. They carry a range of Grass Fed and Grass Finished beef products as well as Angus Grain Fed beef products.

Agridime has operations in Texas, Arizona, Kansas, North Dakota and other states.

Who are Josh Link and Jed Wood?

Agridime LLC is a Texas limited liability company co-founded by Link and Wood in 2017. Link and Wood jointly control Agridime as its highest-ranking officers and managing members, each owning a 45.5% interest in the company.

Agridime co-owner, managing member and executive director Josh Link, 30, resides in Gilbert, Arizona. Link also co-owns Open Range Tallow Co., which specializes in bath and body products made with tallow and JJMDA Media, a web development company. He went to Illinois Central College for Business Administration and Management, according to his LinkedIn profile. Link has personally solicited investors, trained salespeople and executed cattle contracts.

Agridime co-owner, managing member and operations director Jed Wood, 62, lives in Fort Worth. According to his LinkedIn profile, he was previously the director of operations at Systecon North America. He had also worked at Textron Systems and Bell Helicopter. Wood controls cattle operations, including overseeing the firm’s finances.

What is a Ponzi scheme?

A ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors, according to investor.gov. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money.

What did the Agridime cattle contracts entail?

In the cattle contracts, Agridime agreed to sell cattle to an investor for $2,000 per calf and after a year buy back the same cattle at a higher price to provide a guaranteed investment return.

Agridime pays its sales representatives 10% commission for each cattle contract sold, which it does not disclose to investors.

Agridime told investors it would use their money to purchase, feed, finish, process and sell cattle, but instead diverted tens of millions of dollars in investor funds to make Ponzi payments to prior investors, the SEC complaint alleges.

Agridime did not buy the number of cattle required to fulfill the cattle contracts, which is why they’ve only been able to return principal and pay promised returns by making ponzi payments, the complaint says. That means Agridime’s investors did not actually invest in specific, identifiable animals. The success of their investments depends on Agridime’s ability to attract new investors.

As of September, Agridime held cattle contracts requiring them to pay investors more than $123 million in principal (obligations to repurchase cattle), plus approximately $24 million in guaranteed profits. With the company’s cash balances of less than $1.5 million and insufficient operating revenues, the scheme will soon implode unless it continues to raise money from new investors.

What happens next in Agridime case?

The SEC charges the defendants with violating the antifraud and registration provisions of the federal securities laws.

In addition to the emergency relief granted by the court, the SEC is seeking preliminary and permanent injunctions, disgorgement, prejudgment interest, civil penalties and officer and director bars against Link and Wood.

The court has scheduled a hearing for Dec. 20 on the SEC’s motion for a preliminary injunction.

The SEC’s ongoing investigation is being conducted by enforcement staff in the SEC’s Fort Worth and Atlanta regional offices.

“Unless Defendants are enjoined by the Court, they will continue to fraudulently offer and sell unregistered securities in violation of the federal securities laws,” the complaint says.