Agridime accused of Ponzi scheme
Staff writer
Agridime, a Herington business that sells meat, cooking oil, coffee, hand soap, lotion, starter plants, and microgreens, is being sued by the Securities and Exchange Commission for allegedly being a $191 million Ponzi scheme.
SEC got a temporary restraining order Thursday against Agridime and co-owners Josh Link of Gilbert, Arizona, and Jed Wood of Fort Worth, Texas.
The order froze Agridime’s assets, appointed a receiver, and granted other emergency measures because, according to SEC, Agridime diverted millions of dollars in investor funds to make “too good to be true” payments and 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% to 32% were, in the defendants’ own words, too good to be true,” Eric Werner, director of SEC’s Fort Worth regional office, said.
SEC’s complaint against Agridime was filed Dec. 11 in U.S. District Court for the Northern District of Texas.
More than 2,100 investors in 15 states were taken in by Agridime’s claim that the company would use investments to buy, feed, and raise cattle on its network of ranches, SEC’s court filing said.
The company and its officers didn’t buy enough cattle or make enough money from cattle operations to deliver the promised investment returns.
Instead, SEC alleges, the company used at least $58 million of new investor money to make Ponzi payments to earlier investors and more than $11 million to pay undisclosed sales commissions to Wood, Link, Link’s wife, and other Agridime salespeople.
SEC’s complaint claims the company violated antifraud and registration provisions of federal securities laws.
SEC seeks return of investments, interest, civil penalties and bars against Link and Wood.
A hearing on a preliminary injunction is scheduled today.
Agridime advertises that by ordering products, customers purchase their goods from the farm.
Its online site lists Shady Brook Ranch of Herington and Goracke Farms, Morgan Creek Farms, and Circle L Farms of Hope as associated farmers.
“They’re a customer of mine,” a person answering Morgan Creek Farms’ phone said. “We’re working through it.”
The website also lists Heartland Foods and The Spot and Dining Car of Herington, Country Mart of Abilene, and Carlsons’ Grocery of Marion as vendors.
Carlsons’ co-owner Greg Carlson said the store stopped buying meat from Agridime about three weeks ago because it could obtain better quality elsewhere.
Agridime is subject to cease-and-desist orders issued by securities regulators in Arizona and North Dakota.
Arizona has filed a court motion against Agridime and Link seeking for them to be found in contempt of court.