Agridime report says no bankruptcy right now; Ponzi allegations to be determined

A quarterly report and other documents reveal details about the assets, liabilities and more of a company accused of operating as a Ponzi scheme.

On the Agridime.com website, a US Securities and Exchange Commission quarterly status report shares details about the holdings of Agridime, a Texas-based meat company. The company is now selling beef under the “American Grazed Beef” label because the Agridime assets were frozen when the SEC filed a claim alleging that the company was operating as a Ponzi scheme, taking in at least $191 million 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 but now owning enough cattle to make up the funds necessary to make good on the investments.

The report says that the court appointed Receiver does not believe bankruptcy to be the best option at this point, apparently because of the perishable nature of the meat and cattle that remain on hand.

The report says the Receiver anticipates that it will submit the liquidation plan by July 31, 2024.

The report also said a North Dakota investor group is considering purchasing the company.

Based on TSLN’s earlier research, it appears that Agridime conducted business in three different ways. First, it purchased cattle, fed them and eventually sold the meat; secondly, it secured cattle, managing them in one of its designated feedlots,  but allowed the producer to retain ownership of those cattle until slaughter time, at which time Agridime would purchase the cattle; third, it allowed for cash investments, many of which were agreed to with a return of 15 to 30 percent.

TSLN spoke with individuals who conducted business with Agridime in each of the three scenarios and all reported that they were pleased with the business transactions and were always paid in a timely manner, except those whose contracts had not expired at the time of the asset freeze in December of 2023.

TSLN also spoke with the North Dakota Stockmen, who handles brand inspections – providing proof of ownership – for cattle from their state. The ND Stockmen said they were aware of some cattle owners not being paid for their cattle in a timely manner.

The complaint alleges that, since December 2022, the Defendants have used at least $58 million of new investor funds to make Ponzi payments to prior investors and more than $11 million to pay undisclosed sales commissions to Wood, Link, Link’s wife, and other Agridime sales representatives.

The North Dakota Securities Commission issued a cease and desist order to Killdeer, North Dakota cattle buyer Taylor Bang, who was allegedly buying cattle for Agridime from North Dakota and South Dakota producers and also facilitating investments in the company.

The new quarterly report says that Agridime’s books show 29,500 head of cattle on hand, but that the Receiver located just 9,900 head, 2,200 of which were retained ownership cattle and not under Agridime’s ownership.

Agridime’s balance sheet in December of 2023 showed $83,499,938.81 worth of meat on hand, but the Receiver determined that the company had about $20 million in meat on hand.

The report says that as of December, 2023, the company was employing 83 people, and that the receiver reduced that to 43 by cutting some of the sister enterprises. “Cuts included the closing of Agridime Logistics, LLC, a money-losing trucking subsidiary; Open Range Tallow, a company producing candles and skin care products using tallow from Agridime’s cattle production; Farm Fresh Grill, a company-run food truck operating in Gilbert, Arizona; Farm to Home Market, a subsidiary working to create an online platform for ranchers to sell their products (e.g., hay, farm equipment, feed, etc.); and Gilbert Greens, a subsidiary raising “microgreens” for sale on Agridime’s retail website,” said the report.

Agridime owns several real properties, listed in the report:
o Buildings in Hope, Kansas (23 E. 2 nd Ave., 9 E. 2 nd Ave., 125 N. Main St.,

100 Block N. Park St.) – combined value of $240,575.33 on Agridime’s

balance sheet as of December 13, 2023.

o 6 W. Main St., Herrington, Kansas – value of $18,847.05

o 620 W. Main St., Herrington, Kansas – value of $500,000

o 106 N. Broadway St., Herrington, Kansas – value of $38,923.39

o 12 N. Broadway St., Herrington, Kansas – value of $33,996.89

o 2400 Block 400 Ave., Herrington, Kansas and 700 Block S. 5 th St.,

Herrington, Kansas – value of $278,906.50

o Cedar Valley Farms, Abingdon, Illinois – value of $750,000

Agridime’s cattle inventory is reported as follows:

• Cattle (approximate inventory as of March 31, 2024)

o On Agridime property or property of contractors (“Agridime Cattle”):

–Morgan Creek Farms (Kansas): 700 cows and 300 calves

–Goracke Farms (Kansas): 140 cows and bulls and 110 calves

–Cedar Valley Farms (Illinois): 315 cows and 50 calves

o On feed lots (“Feed Lot Cattle”)

–Cattle Empire, LLC (Kansas): 2486 larger calves

–Brookover Feedyards, Inc. (Kansas): 856 larger calves

–PX Feeders (Texas): 45 cows

The report says that the  “American Grazed Beef” company was developed to market what would have been Agridime meat. The first sales were Feb. 22, 2024. In its first month, the company completed $250,263.86 worth of sales.

The report said by March 31, 2024, gross wholesale and retail meat sales totaled $2.8 million, and there is approximately 841,000 lbs of meat in warehouses and at least 3,400 head of cattle on feed.

The Receiver is “optimistic” about the new company, particularly since some so-called excessive costs have been cut such as shipping in heavy coolers and providing a free freezer with the purchase of ¼ of beef.

The report says that when the SEC implemented the asset freeze, that at least one of the feedlots did not disburse funds to Agridime (as it had in the past) when cattle were sold. The report then shares this information about the cattle: “Additionally, all of the feed lots eventually withheld cattle sale proceeds because there were competing claims asserted on the cattle sale proceeds by various ranchers under purported contracts that Mr. Link, on behalf of Agridime, had entered into with the ranchers. That is, the Receiver discovered that Agridime was not only financing its own cattle on the feed lots, but the company also was financing cattle from ranchers and passing them off as Agridime’s cattle. The contracts Agridime entered into with these ranchers vary. Agridime’s cattle-industry-specific personnel have informed the Receiver that the terms of these contracts and the manner in which cattle were delivered and paid for under the contracts are not industry standard. It appears that Receivership Defendants were engaging in this as part of their larger scheme.”

The report included this information about the Packers and Stockyards’ involvement: “This issue has been further complicated because the Packers and Stockyards (“P&S”) division of the U.S. Department of Agriculture (USDA) has been assisting ranchers in asserting packer and dealer trust claims on these proceeds, which has further slowed the flow of these cattle sales proceeds to the Receiver. Again, the Receiver has been forced to expend considerable time and expense communicating and corresponding with the USDA, the North Dakota Stockmen’s Association, and attorneys for the ranchers (and the ranchers themselves) in an effort to keep these parties apprised of the status of the disputed cattle.”

A consulting firm is reviewing all bookwork to determine whether or not Agridime was operating as a Ponzi scheme and to determine how much is owed to each investor “victim” on cattle contracts purchased.

Exhibits on the Agridime.com website reveal Agridime’s transactions since the asset freeze, retained ownership cattle producers, cattle contract investors, creditors, and known assets (not depreciated).