Problems With|Chinese Hog Men

NASHVILLE (CN) - AgFeed, a China-and-Tennessee-based hog and feed farm, pulled off "a massive accounting fraud" by inflating revenue from its China operations by $239 million, the SEC claims in court.

AgFeed and six of its former executives will pay $18 million to settle the charges, the SEC said Monday. The settlement must be approved by the bankruptcy court in Delaware as well as the Nashville Federal Court.

Defendants include former executive chairman Songyan Li, former CEO Junhong Xiong, former CFO Selina Jim, and former controller Shaobo Ouyang, all of China, and Edward J. Pazdro, a Hendersonville, Tenn. CPA.

From 2008 through 2011 the defendants inflated the income from their China operations by 71 percent to 103 percent a year, the SEC says.

"Xiong, Jin, Li, and Ouyang inflated revenues by, among other things, booking sales of nonexistent hogs and by manipulating hog weights, and later covered it up by, among other things, reporting that the fake hogs had died," the complaint states.

AgFeed did not have to admit it did anything wrong.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit