CFTC files charges against Texas company over cattle purchase program

The Commodity Futures Trading Commission (CFRC) filed a civil enforcement action against a Texas company and its founders for allegedly defrauding customers through a scheme involving cattle.

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The action was filed against Agridime LLC, a Texas corporation, and its co-founders, Joshua Link of Gilbert, Arizona and Jed Wood of Ft. Worth, Texas. It was filed in U.S. District Court for the Northern District of Texas.

The CFTC’s complaint alleges the defendants engaged in a scheme to defraud thousands of customers in at least 14 states by soliciting, accepting, and using customers’ funds to pay undisclosed commissions. They also allegedly used later customers’ funds to pay profits to earlier customers, in the manner of a Ponzi scheme, rather than for the purposes Agridime represented those funds would be used.

The company had claimed the funds would be used in connection with contracts of sale of a commodity in interstate commerce, which was in fact, cattle, the complaint said. The CFTC alleges that from approximately 2021 until 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%, the complaint alleges. 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.”

How the cattle program worked is, 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. That would happen until the cattle were ready to be processed and the beef sold.

The complaint alleges that 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. Further, the CFTC said that the customers’ funds were also used to pay approximately $11 million in undisclosed commissions to Agridime personnel.

The CFTC is seeking restitution to defrauded customers, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.