The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Agridime LLC, accusing it of operating a Ponzi scheme. On May 10, 2024, the regulatory agency filed the complaint against Agridime and its co-founders Joshua Link and Jed Wood in the Northern District of Texas.

According to the CFTC's complaint, from 2021 until around December 11, 2023 ("the relevant period"), Agridime and its co-founders executed a deceptive scheme by soliciting, accepting, and using customer funds to pay other customers, which constitutes a Ponzi scheme. This was contrary to Agridime's claims that the funds were used for interstate commodity sales contracts, specifically for customers purchasing cattle.

During the relevant period, it is alleged that the defendants received over $161 million from more than 2,000 victims for the purchase of cattle.

Throughout the relevant period, Agridime operated an online platform that claimed to allow customers to buy and sell cattle and promised victims guaranteed annual returns of at least 15% to 20%. As advertised, Agridime's cattle purchasing program offered customers the opportunity to buy and sell cattle without the need for daily care. According to Agridime's solicitation materials, customers could "make money raising cattle without doing all the work" by purchasing livestock.

In Agridime's cattle program, customers typically bought a live cow for $2,000, and Agridime was supposed to feed and care for the cattle through its partnering farmers until the cattle were ready for processing and beef sale. In return for their $2,000 livestock purchase price, customers were guaranteed annual returns of 15% to 20% in the solicitations, although the "livestock contracts" themselves guaranteed annual profits of up to 32%.

Agridime claimed that customer funds would be used solely for the purchase, feeding, and care of the cattle purchased. However, Agridime failed to buy enough cattle to meet its obligations under the livestock contracts, necessitating the use of new customer funds to pay the guaranteed profits to earlier purchasing customers.

Additionally, it is alleged that customer funds were used to pay approximately $11 million in undisclosed commissions to Agridime employees, including defendants Link, his wife, and Wood.

From December 1, 2022, to September 30, 2023, Agridime used funds from new cattle sales to pay the principal and returns to previous customers in a Ponzi scheme manner.

The CFTC charges the defendants with violating the Commodity Exchange Act (CEA), 7 U.S.C. § 1-26, and CFTC regulations (the "Regulations"), 17 C.F.R. Pts. 1-190 (2023), particularly the anti-fraud provisions of Section 6(c)(1) of the CEA, 7 U.S.C. § 9(1), and Regulations 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2023).

The CFTC initiated this action to prohibit the defendants' illegal acts and practices, enforce compliance with the CEA and CFTC regulations, and ban them from engaging in any commodity-related activities.

Moreover, the CFTC seeks civil monetary penalties for each violation of the CEA and CFTC regulations, as well as remedial ancillary relief, including but not limited to trading and registration bans, restitution, disgorgement, rescission, and pre- and post-judgment interest.