The U.S. Securities and Exchange Commission (SEC) has taken swift action to stop a massive cattle fraud scheme that defrauded investors of more than $191 million. The SEC secured a short-term hold order and froze assets. The company’s owners, Arizona’s Josh Link and Jed Wood from Fort Worth, were appointed a trustee to handle the ongoing fake operations by the Agridime.
The SEC filed a complaint on December 11, 2023, stating that Agridime falsely claimed to be experts in meat sales, distribution, and animal supply chain management. They managed to convince more than 2,100 investors in 15 states by promising annual returns of 15-32 percent.
However, the regulatory body alleges that instead of investing the funds as promised, the defendants used them to pay previous investors in a Ponzi scheme and also for undisclosed sales commissions. They relied on new investors’ money to repay earlier investors.
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.
The SEC’s investigation indicates that Agridime fell short of its commitment to using funds for cattle-related activities, and the defendants failed to generate sufficient revenues from cattle operations to fulfill promised returns.
Deceptive Tactics Unveiled By SEC
The SEC’s complaint alleges that Link and Wood used various methods to conceal their fraudulent activities from investors and regulators. They created fake invoices and bank statements to show that they sold cattle at inflated prices. They also used shell companies and offshore accounts to launder money from their scheme.
The regulatory body also claims that Link and Wood manipulated the market for cattle futures contracts by creating artificial demand and supply through fraudulent transactions. They allegedly used their own funds or borrowed money from other sources to buy low-quality cattle futures contracts and sell them at high prices before they expired.
The SEC’s action against Agridime is part of its ongoing efforts to protect investors’ assets from fraudsters who exploit their trust. The regulatory seeks preliminary and permanent injunctions against Link and Wood. A court date for the SEC’s request for a temporary order is set for December 20, 2023.
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