Two Texas cattle traders promised epic returns on investment. Now, they’re accused of a $161 million Ponzi scheme

In 2021, two Texas entrepreneurs started marketing a creative idea. For just $2,000, you could buy a cow from your couch. You wouldn’t ever touch the animal—their company, Agridime, would use your money to house, feed, and ultimately slaughter and process it. A few years down the line, they’d sell the beef, pocket a small fee, and give you back your money—plus at least 15% annual interest, guaranteed, and potentially up to 32%.

There was just one problem: The entire thing was a Ponzi scheme. That’s according to a lawsuit filed by the Commodity Futures Trading Commission last week accusing Agridime’s two owners of lying about their business model and swindling thousands of investors out of $161 million.

“Customers' funds were…used to pay approximately $11 million in undisclosed commissions to Agridime personnel,” wrote the CFTC in a court filing. “Agridime used customer funds from the sale of new cattle to pay previous customers’ principal and returns, in the manner of a Ponzi scheme.”

Agridime was already under scrutiny from the Securities and Exchange Commission, which obtained a restraining order against the company last December, freezing all of its assets and stopping it from doing business.

“Unfortunately for investors, the investment offering was too good to be true,” wrote the SEC in a court filing. “Agridime has only been able to return principal and pay promised returns by making Ponzi payments.”

Agridime’s business model sought to disrupt the $88 billion cattle production industry, but the execution was flawed from the start. First, according to the SEC, Agridime never actually went out and purchased a head of cattle for every customer who ordered one, so they dipped into new customers’ payments to cover interest for earlier investors. Second, the company paid undisclosed commissions to senior salespeople, senior executives, and their spouses—to the tune of over $11 million.

“Given the company's cash balances of less than $1.5 million as of September 30, 2023, and insufficient operating revenues, it appears that Agridime's Ponzi scheme will soon implode, unless it continues to raise money from new investor-victims,” wrote the SEC.

Agridime is part of a surge in the frequency of Ponzi schemes over the past three years, many of them involving cryptocurrency.

“Curtailing Ponzi schemes and holding accountable the individuals responsible for these scams is a vital component of the SEC's enforcement program,” the agency says.

Fortune could not reach Agridime for comment; the company’s phone line was disconnected.

This story was originally featured on Fortune.com