Local cattle scheme costs more than $100 million to local farmers … – WPSD Local 6

BENTON, KY — A loss of millions of dollars, a suicide, tens of thousands of “ghost cattle” — all tied to a scheme that is costing local farmers and investors nearly $100 million. A major agrifinance company has filed a federal lawsuit against a local farm.
Drovers, a cattle magazine, reported that Brian McClain, a farmer in Benton, Kentucky, had been recruiting investors for the past six years. He was guaranteeing a 30% return of investment. His cattle inventory grew very large, very quickly. Investors saw profits in the beginning, but it turns out the payments were all made with borrowed money. 
The federal lawsuit filed by Rabo AgriFinance outlined the timeline around when it began loaning money to McClain Farms and when Rabo caught wind of an issue. 
Rabo loaned McClain Farms money four times between 2018 and 2023. First, in May of 2018. A total of $332,500.
Then, in December 2022, McClain Farms had, on paper, almost 90,000 head of cattle worth $100 million.
That was just before the final loan from Rabo came in January 2023, a total of $54 million. That’s also when Rabo became suspicious that something was not right, and started looking into McClain’s business.
Rabo sent a collateral inspection team to count the actual cattle in Kentucky and at two locations in Texas.
The number came in at fewer than 11,000 head among all three locations by April.
That’s a $60 million decrease in two months.
On April 6, Rabo sent McClain Farms a demand for payment letter.
Then, on April 11, a forbearance agreement was established between Rabo and McClain farms. That signed everything over from McClain to Rabo.
On April 18, the Marshall County coroner confirmed that Brain McClain had died by suicide.
In its lawsuit, Rabo says it discovered on April 20 that the McClain defendants had sold, transferred and disposed of no less than 20,000 head of cattle.
Rabo says it never saw the proceeds, which violates the forbearance agreement. On April 28, McClain Farms and two others named on the lawsuit filed for bankruptcy.
May 3, the U.S. Department of Agriculture told investors with McClain Farms who have not been paid to file dealer trust claims.
Investors can still apply, but there is a time limit. Those claims must be filed with agricultural marketing service.
Claims should be submitted to: Agricultural Marketing Service, Fair Trade Practices Program, Packers and Stockyards Division, Midwestern Regional Office, 210 Walnut Street, Room 317, Des Moines, IA 50309. Claims can also be emailed to PSDDesMoinesIA@usda.gov.
Those who have questions about the claims process can call the PSD Midwestern Regional Office at 515-323-2579.
Download the document below to read the lawsuit for yourself. 
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