We wrap up 2023. We have all the details about Cattle Ponzi Schemes plus we will tell y'all about an opportunity of a lifetime to lay into one of the most efficient sets of cows around. Join Jeff 'Tigger' Erhardt, the Boss Lady Rebecca Wanner aka 'BEC', and our crew as we bring you the latest in markets, news, and Western entertainment on this all-new episode of the Ranch It Up Radio Show. Be sure to subscribe on your favorite podcasting app or on the Ranch It Up Radio Show YouTube Channel.
EPISODE 165 DETAILSSo many of you have reached out inquiring about the latest details about the Agridime Cattle Ponzi Scheme. It gets rather complicated, but BEC and I break it down for you.
Some of the most feed efficient cows around are coming up for sale. Lucky 7 Angus Ranch is selling their spring calving Oklahoma cows at public auction, January 8th at Ogallala Livestock Auction in Ogallala, Nebraska.
AGRIDIME
According to articles in the Bismarck Tribune and Ag Week, the U.S. Securities and Exchange Commission, which filed a civil lawsuit against the company on Dec. 11, has labeled the operation a Ponzi scheme, in which Agridime was using investor money to pay existing investors and commissions to salespeople rather than using new money to do what it said it would — purchase, feed and care for cattle to be finished and sold to consumers as beef. The SEC has received a temporary restraining order, including an asset freeze, on the company owned by Joshua Link of Arizona and Jed Wood of Texas, through Jan. 9, pending a hearing on Jan. 5.
As of Sept. 5, 2023, Agridime-held cattle contracts required payment to investors of $123 million in principal, plus $24 million in guaranteed "profits." The company, as of Sept. 30, 2023, had less than $1.5 million and insufficient operating revenues, the SEC complaint said.
Carl Karpinski, enforcement attorney for the North Dakota Securities Department, said there is no confirmed tally yet on investment losses in North Dakota. But he said the eventual number may be significant.
"North Dakota is one of the most — if not the most — affected states" in the nation, he said.
While the SEC complaint did not go into specifics about the cattle the company did purchase, other than specifying that "Defendants did not buy the number of cattle required to fulfill the Company's obligations under the Cattle Contracts," Agridime was licensed as a livestock agent in North Dakota. Agriculture Commissioner Doug Goehring announced on Dec. 15 that it no longer will be licensed in the state.
“Agridime was licensed in North Dakota,” Goehring said in a statement. “Their renewal was pending based on issues with bonding. The actions taken by the SEC will support our denial of their license and we will issue a cease-and-desist order, effective (Dec. 15), to prevent further purchase of livestock.”
Karpinski said the Securities Department is not working on the cattle sales side of the case, though the North Dakota Department of Agriculture and U.S. Department of Agriculture are involved. Ellingson encouraged producers involved in the case to contact the Stockmen's Association at 701-223-2522.
HOW AGRIDIME OPERATEDThe SEC complaint said Agridime raised $191 million from more than 2,100 investors in at least 15 states since January 2021. Instead of using investor money as advertised, the SEC filing said Agridime has used at least $58 million from Dec. 1, 2022, to Sept. 30, 2023, in investor funds from new cattle contracts to make principal and profit payments to previous investors.
Agridime would sell investors cattle contracts for $2,000 per calf. The company would then promise to buy the cattle back a year later at return rates of 15% to 32%, the complaint says.
Agridime paid commissions to salespeople, typically 10%, for each cattle contract sold, which also was not disclosed to investors. The SEC documents say that through May 2023, commissions paid exceeded $11.1 million in total, including "at least $5.6 million to a salesperson in North Dakota," $1.3 million to Link and his wife and $1.3 million to Wood.
By using the funds to make previous investor payments and to pay commissions, "Agridime has not purchased enough cattle to fulfill its Cattle Contracts. Agridime's investors, therefore, do not actually invest in specific, identifiable animals. Instead, the success of their investments depends on the success of Agridime's purported cattle operation, including its ability to attract new investors."
Agridime had operations in Texas, Arizona, Kansas, North Dakota and "other states," court documents said. In North Dakota, Securities Commissioner Karen Tyler on May 24, 2023, ordered a cease and desist order against Agridime and Link. Neither Agridime nor Link were registered as an issue-dealer or a broker-dealer in North Dakota, the cease and desist order said. Despite that, Link on Sept. 7, 2022, sold an investment contract to a North Dakota resident for $250,000, the order said.
The SEC complaint said Agridime sold $9 million in 18 cattle contracts to North Dakota residents since the issuance of the cease and desist order in May. Agridime also sold $1 million in cattle contracts to Arizona residents since a similar order was issued there on April 18, 2023, and an Agridime salesman there admitted under oath on Oct. 18 that he still was selling contracts in Arizona. The state of Arizona in November filed a contempt motion against Agridime and Link.
Tyler issued another cease and desist order in North Dakota on Dec. 15 against Taylor Bang of Killdeer, which alleged that Bang, despite not being registered as an agent with the Securities Department, had received $6,055,390 in "transaction based commissions by selling unregistered cattle investment contracts on behalf of Agridime in or from North Dakota" from Jan. 1, 2021, through Oct. 30, 2023. Under North Dakota law, the North Dakota Securities Commissioner can assess civil penalties of $10,000 per violation of the Securities Act.
Bang said he’s always approached his business honestly and was simply taking direction from Agridime.
“I was just doing a job.”
Bang disputes the claim that he made more than $6 million in commissions from Agridime. He said that figure is “way high” and that he wasn’t sure how the Securities Department arrived at that number. The Securities Department says it calculated the figure from subpoenaed financial records.
Bang said he was aware of the May cease-and-desist order the North Dakota Securities Department filed against Agridime and Link, but that as far as he could tell, the company took the legal demands outlined in the orders seriously and was working to address them.
The rancher said he’s worked with Agridime for roughly seven or eight years. He said he still thinks very highly of the company and is proud to support the American livestock industry. “To date, I have not had one person that has done this, as far as the cattle-purchasing contracts, not get paid on time,” Bang said.
In the Dec. 15 order, Tyler ordered Bang to turn over all commissions received from Agridime, to be deposited into the North Dakota Investor Restitution Fund and to be liable along with Agridime to Agridime investors.
LUCKY 7 ANGUSIn 1895 James Jensen started a five-generation ranch, from which came Lucky 7 Angus. That first winter he lived in a dug out on the side of a hill and shoveled snow off the grass to feed his 3 horses and 7 cows in what is called the Nation's Icebox, Boulder, Wyoming. We know very well the blood, sweat and tears it takes to keep the family ranch afloat. And that is why we take it very seriously that our customers are the most profitable in the livestock industry.
Lucky 7 Angus was started in order to raise bulls that could hold up better for commercial cattlemen, such as ourselves. We have accomplished the goal... For the past 30 years we have been unmatched in raising cows and bulls in tougher conditions than the rest of the industry, which has made the most durable bulls for our customers. We were the first seedstock operation to set minimum standards for PAP testing. The number of animals tested with these standards, are unmatched in the industry, which helps our customers with less sickness and death loss. We were the first seedstock operation to test for feed efficiency in real world conditions. Then in 2002 we started feed efficiency testing by purchasing large vertical mixers in order to know how much every cow, calf and bull on the place ate. In 2009 we were the first Angus only seedstock producer in the U.S. to purchase a GrowSafe feed intake monitoring system. Lucky 7 Angus is unmatched in the industry by having both real world and scientific feed efficiency testing data, which allows our customers to make more pounds of beef per acre. The measures we have taken in producing our genetics gave us enough confidence in our bulls to offer the nation's first 4 year guarantee. This guarantee is unmatched in the industry and allows our producers a 33% advantage when buying bulls. What makes Lucky 7 different is our goal, to have the most profitable customers in the livestock industry. We are proud that the hard work great grandpa James put into the start of this ranch has not been in vain.
FEATURINGJim Jensen
Lucky 7 Angus
https://www.lucky7angus.com/
@Lucky7Angus
Kirk Donsbach: Stone X Financial
https://www.stonex.com/
@StoneXGroupInc
Mark Van Zee
Livestock Market, Equine Market, Auction Time
https://www.auctiontime.com/
https://www.livestockmarket.com/
https://www.equinemarket.com/
@LivestockMkt
@EquineMkt
@AuctionTime
Shaye Koester
Casual Cattle Conversation
https://www.casualcattleconversations.com/
@cattleconvos
Questions & Concerns From The Field?Call or Text your questions, or comments to 707-RANCH20 or 707-726-2420
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Tigger & BEC represent the Working Ranch world by providing the cowboys, cowgirls, beef cattle producers & successful farmers the knowledge and education needed to bring high-quality beef & meat to your table for dinner.
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References
https://www.stonex.com/
https://www.livestockmarket.com/
https://www.equinemarket.com/
https://www.auctiontime.com/
https://gelbvieh.org/
https://www.imogeneingredients.com/
https://alliedgeneticresources.com/
https://westwayfeed.com/
https://medoraboot.com/
https://www.bek.news/dakotacowboy
http://www.gostockmens.com/
https://www.agridime.com/
https://www.ogallalalive.com/
https://bismarcktribune.com/news/state-regional/killdeer-rancher-accused-of-making-6m-in-illegal-cattle-sales-profits/article_a37f97e0-a033-11ee-827d-bf4468d45659.html
https://www.agweek.com/livestock/cattle/north-dakota-cattle-producers-out-money-on-cattle-sold-to-agridime
https://www.lucky7angus.com/
https://www.bredforbalance.com/
https://www.wasemredangus.com/
