An Iowa ag company accused of operating a billion-dollar check-kiting scheme is being sued by their lender, Compeer Financial, that claimed 110,000 piglets were put at risk of starvation.
Compeer Financial of Minnesota is suing Sunterra Farms Iowa Inc., Sunwold Farms Inc. and Lariagra Farms South Inc. in U.S. District Court. Compeer alleges the three defendants operate extensive swine operations in Iowa and South Dakota and have granted Compeer, their lender, exclusive security over their collective assets.
In March, Compeer asked the court to appoint a receiver to take control of the defendants’ assets so Compeer could protect its collateral by continuing to feed and care for 110,000 head of swine, reports the Iowa Capital Dispatch.
Animal Care is No. 1 Priority
A federal judge in South Dakota agreed and on March 28 appointed PVC Management II, LLC, (conducting business as Pipestone Management) to be the receiver in the case.
“Our immediate goal is to care for the animals and stabilize the team,” says Hannah Walkes, president of Pipestone Services. “We are doing that and want to alleviate any previous welfare concerns with assurance that all animals have been and continue to be fed. We will work through long-term options as we get our arms more fully wrapped around.”
The court appointed Pipestone as the receiver due to their experience in the swine industry, Compeer said in a statement.
“Pipestone is an independent entity that is responsible for the operation, including ensuring the livestock are cared for during this time,” Compeer said. “Because legal action involving a client is pending, we are unable to comment further.”
A “Long-Running Fraud”
The companies being sued are allegedly operated by the Price family of South Dakota. This includes Ray, Art and Glen Price, who own and manage 110,000 head of swine in 54 barns located in and around Yankton County, S.D. The animals are owned by either Sunterra or Lariagra, and the article said they are among 500,000 hogs managed by Sunterra.
In the lawsuit, Compeer claims that because of what it calls “the long-running fraud” perpetrated by the defendant companies, they cannot be trusted to operate their businesses and protect their assets, including the 110,000 head of swine in Yankton County.
The lawsuit says the three defendant companies have engaged in check kiting. This is a fraudulent practice in which a company draws checks from one bank account for deposit in another bank account that it controls, when neither account has sufficient funds to cover the checks. Essentially, the process takes advantage of the delays in processing checks between banks, allowing one account or another to continually show credits for funds that have yet to be collected.
Bad Checks Abound
Earlier this year, the lawsuit claims the defendant companies issued each other numerous checks, in nearly identical amounts, on a daily basis — with some checks ranging from $800,000 to $990,000. These amounts are just below the threshold that would trigger scrutiny from regulators, the article said.
Compeer ended up paying the companies interest, the lawsuit claims, because the transactions created phony positive account balances.
“Compeer alleges that on Feb. 12, 2025, the day after it asked Ray Price, the CEO of the defendant companies, about the transactions, it received a batch of checks totaling $9 million drawn one of the defendants’ Canadian bank accounts for deposit into the defendants’ account with Compeer,” the Iowa Capital Dispatch reports.
According to the lawsuit, Ray Price admitted later that day that the checks were intended only to prevent the Compeer account from being overdrawn and said if Compeer attempted to deposit the $9 million, it would trigger a corresponding overdraft in the Canadian account. Price acknowledged this was wrong, the lawsuit claims.
Price spoke to Compeer personnel about 24 hours later, the lawsuit claims, explaining that the Canadian account was overdrawn by approximately $21 million and Compeer needed to immediately “send the money back” to the Canadian bank to cover the overdraft, the article said.
Compeer did not comply. Later in February, the lawsuit says Compeer learned the Canadian bank had rejected 65 checks totaling $59.9 million previously credited by Compeer to the defendants’ accounts. As a result, the defendants’ $21 million positive cash balance at Compeer was instantly wiped out and replaced with a $36 million debt owed by the defendants to Compeer, the Iowa Capital Dispatch reports.
According to court records, on March 17, the Canadian bank asked for a receiver to be appointed to look after the defendants’ assets. However, the listed assets in that case didn’t include the 110,000 head of swine in Yankton County, or the 370,000 head owned by third parties and managed by Sunterra, the article explained.
Compeer said in court filings last month that it had provided funds necessary for the care and feeding of the 110,000 pigs, but was no longer willing to do so “while the parties who perpetrated this fraudulent scheme” remain in control of Sunterra, Sunwold and Lariagra, the article said.
After the court appointed a receiver on March 28, Compeer said they would “advance the money necessary to protect its collateral and prevent the animals’ starvation,” the article said.
On April 11, Meatingplace reported that Sunterra Enterprises Inc., and many of its subsidiaries, have filed notices under the Bankruptcy and Insolvency Act.
