Compeer Financial, a member-owned Farm Credit cooperative, has filed a lawsuit against three hog farms in Yankton County, South Dakota—Sunwold Farms, Sunterra Farms, and Lariagra Farms—alleging involvement in a check kiting scheme resulting in significant financial losses. The lawsuit, filed in the South Dakota District Court, seeks the appointment of a receiver to manage approximately 110,000 hogs and to recover damages totaling $36 million.
According to the complaint, the defendants pledged their pig inventory as collateral for an $11.5 million loan from Compeer Financial. However, due to alleged fraudulent check kiting activities, Compeer faces substantial losses. Check kiting involves creating artificial balances by continuously writing checks between accounts at different banks without sufficient funds, exploiting the time it takes for checks to clear.
The entities involved are connected to the Sunterra Group, a multi-state and international swine operation led by the Price family based in Alberta, Canada. Sunterra Group manages approximately 500,000 pig spaces across various entities, including Sunwold and Lariagra. Specifically, Sunwold Farms, a South Dakota corporation, finishes over 62,000 pigs, while Lariagra Farms, also based in South Dakota, finishes approximately 48,725 pigs.
Compeer Financial emphasizes the urgency of appointing a receiver to ensure the continued care of the animals, stating that they are the sole available source of funding for their maintenance. The court has granted a motion by The Pork Group and Tyson Fresh Meats to intervene in the case. The Pork Group has a management agreement with Sunterra, and Tyson Fresh Meats has a contract with Sunwold to deliver finished hogs for processing.
Compeer is seeking judgments of $14.0 million against Sunwold Farms, $18.9 million against Sunterra Farms, and $2.3 million against Lariagra Farms, in addition to unpaid interest, late charges accrued after March 7, and legal expenses. An evidentiary hearing is scheduled in Pierre, South Dakota, to further address the claims.
This case underscores the complexities and risks associated with financial management in the agricultural sector, particularly within large-scale livestock operations.
