Massive Ponzi Scheme Unveiled in Kentucky: Cattle Operations Seek $122 Million in Unpaid Sales

Jun 14, 2023

At least 96 cattle operations and individuals have filed claims totaling over $122 million with the U.S. Department of Agriculture (USDA) against a west Kentucky farm and its associated feed yards. The farm is accused of orchestrating a Ponzi scheme that has left numerous sellers unpaid and facing substantial losses. Progressive Farmer magazine published a report detailing the escalating claims under the Packers and Stockyards Act.

The allegations involve McClain Farms, 7M Cattle Feeders Inc., McClain Feed Yard Inc., and the estate of Brian McClain, the farm's owner who passed away in April 2023. In May, agricultural finance company Rabo AgriFinance initiated a lawsuit against these entities, citing breach of contract, wrongful conversion of collateral and livestock, and breach of security agreement, among other claims. Rabo AgriFinance alleges that McClain guaranteed investors a 30% return on investment, using borrowed money to pay off initial investors in what appears to be a Ponzi scheme.

The lawsuit reveals that McClain and the associated companies amassed millions of dollars in debt with Rabo AgriFinance between 2018 and 2023. Rabo AgriFinance discovered discrepancies during an audit, finding a significant reduction in the number of cattle reported as collateral compared to the actual count. The defendants allegedly sold or transferred a substantial number of cattle, violating a forbearance agreement.

Bankruptcy filings in Texas by the three companies revealed liabilities amounting to $175 million, including claims by creditors and the USDA. Fourteen of the filed claims are for $1 million or more, with several feeder and livestock businesses in Kentucky and Texas among those affected.

The bankruptcy trustee, in agreement with Rabo AgriFinance, believes that the McClain businesses were involved in "massive fraud." The situation has sent shockwaves through the agricultural community, leaving many cattle operations grappling with significant financial losses.

Video: The FCDC and AgSmart Bring Plant Breeding to a Wider Audience

In the vast prairies of Alberta, Olds College’s Field Crop Development Centre (FCDC) stands as a beacon of innovation and research in the agricultural world. The institution has become a key player in advancing agricultural technologies and practices. The FCDC’s commitment to applied research has driven them to seek effective means of disseminating their findings and creating a positive impact on the farming community.

One such avenue that aligns with their mission is AgSmart, an event dedicated to showcasing cutting-edge agricultural technologies. The coming together of the FCDC’s annual Field Day and Ag Smart has proved to be a natural fit, fostering a synergy that benefits both parties and propels the agriculture industry forward. The FCDC Field Day took part in conjunction with AgSmart for the first time this week on Aug. 1-2 in Olds, Alta. FCDC Program Director Kofi Agblor and Olds College VP of Development Todd Ormann sat down for an interview with Marc Zienkiewicz to discuss the significance of the two events taking part together and what the future holds.

The Intersection of Research and Technology The essence of the FCDC lies in its dedication to plant breeding and new seed varieties, particularly barley and triticale. While conducting research is essential, it becomes meaningful when its benefits are shared with the wider community. This is where AgSmart steps in, providing a key venue for the FCDC to showcase their research. This union between research and technology creates a holistic and enriching experience for farmers, ranchers, and industry professionals, the pair said.

Seeds as Technology For the FCDC, the partnership with AgSmart goes beyond mere event collaboration. It is about creating an environment that bridges the gap between seeds and smart technology, Ormann said. The college believes that for technology to truly revolutionize agriculture, it must begin with a strong foundation — high-quality seeds. As the saying goes, “it all starts with a seed.” To demonstrate this critical aspect, the collaboration aims to showcase the seed value chain as an integral part of the smartphone.

The Birth of a Powerful Alliance The idea of joining forces emerged when staff realized the potential synergy between AgSmart and the FCDC Field Day. With just a few days separating the two events, a proposal was put forward to merge them. The marketing and communications teams from both sides worked seamlessly to ensure the essence of both events remained intact, creating a powerful alliance that leverages the strengths of each, Agblor said.

Driving Advancements in Breeding For Agblor, the partnership with AgSmart has tremendous potential to drive advancements in breeding and other technology. With technologies like drones and imaging becoming integral to phenotyping, breeding is no longer confined to vast fields to assess thousands of plants manually. Instead, it benefits from the data-rich insights brought about by smart technologies. These advancements make breeding more efficient, precise, and instrumental in shaping the future of agriculture.

Overcoming Challenges Together While the partnership between Olds College and Ag Smart has been a resounding success, there are challenges on the horizon. Securing stable funding for long-term breeding initiatives is crucial to sustain progress. The college is committed to navigating these challenges and investing in agriculture’s future sustainably, Agblor said.

Massive Ponzi Scheme Unveiled in Kentucky: Cattle Operations Seek $122 Million in Unpaid Sales

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Video: The FCDC and AgSmart Bring Plant Breeding to a Wider Audience

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