How to get rich in worm business

Imagine you've recently retired. You don't have enough income to make ends meet, so you're thinking of working part time. You wonder what to do. You see an ad for a business opportunity that sounds like fine work. Raising redworms part-time will earn you a pretty good income, they say. There's some labor, but not much, and it's healthy work. “It'll keep my wife and I active”, you say. The ad promises you can make BIG money. You weren't thinking to grow that large, really. Anyway, you call the number.

You're told that this is a rapidly growing industry, and that there's a huge demand for worms. The salesman mentions that landfills and other waste management projects around the country need huge numbers of worms for their projects. You're told that with just a little time and care, your redworms will double in population every month and a half! The company will buy back all the worms you produce. So, why not go for it, you think?

You're concerned that their minimum contract is $10,000. It sounds like a lot. But, they insist, you're going to make that back in the first year of your three-year contract. From then on, it's all profit. They urge you to get started NOW, and tell you that they may be raising their contract prices soon. “The sooner you start raising these worms, the sooner you start earning your retirement income.” By now, this sounds pretty good—almost too good to be true.

This kind of offer drew in over 2000 individuals and families who, from between 1998 and March 2003, invested in a contract with B&B Worm Farms, spending between $5,000 and $60,000. Far from unique, B&B is one long line of Ponzi scams (see pg. 7 and pg. 13 for more details) that have fleeced unwitting investors during the last four decades.

B&B Worm Farms was started by Greg and Lynn Bradley, who were first introduced to worms when they bought a worm growing contract with a company called VermiTrade (which was started by Scott Haley, Dana and Dawn Allen in May 1999). Greg Bradley and Dana Allen left VermiTrade after it was issued Cease and Desist orders in Iowa and Nebraska. Greg and Lynn started B&B Worm Farms, independent of VermiTrade, but operated using the same business model. After VermiTrade was shut down, Scott Haley went to a company called CRS, where he became their president of sales. B&B was incorporated in Nevada by Greg and began selling contracts of its own. Touting greatly exaggerated claims for the worms' reproduction rates and twisting facts, the company gathered its prey.

B&B Worm Farms claimed to have buyers for great quantities of worms. They flaunted a bill of lading for a load of castings/compost blend for hundreds of tons to a Sierra Leone company (though no signatures appeared on the bill). Many things Greg Bradley told growers we now know involved only partial truths, like cleaning up waste at an Iowa composting facility and receiving money from the State of Louisiana Department of Economic Development. At this year's growers convention, bookkeeper Karen Gambino announced that better than 70% of the company income came from the sale of new worm growing contracts.

In May 2002, B&B had been ordered to register with Oklahoma's Department of Securities or face investigation. Greg's promise to do so bought the company time to continue to operate. He informed the Board that registration was taken care of—but, apparently, nothing was done. Greg died on January 26 this year, at 40.

Then, on March 19th, the State of Oklahoma announced its investigation into B&B for allegedly offering the sale of unregistered business opportunities in the State. That same day the B&B sales office appeared to be closed and no one from any B&B would answer any phone calls. The State of Kentucky issued B&B a Cease and Desist Order on April 3 and filed a consumer protection suit. The State of Oklahoma Department of Securities ordered B&B to Cease and Desist on April 14. On April 17th the state of OK froze the company assets, and on April 23rd B&B Inc. filed a petition for bankruptcy protection. By the end of March, over nine states' agencies had opened investigations.

While it operated, the company looked good to nearly everyone from the outside. Growers were paid for worms delivered to the distribution centers, and new contracts were being sold—some 1200 during the 2002 year, they reported. The company organized an annual growers convention. Over 800 growers and prospective growers attended this years' convention, which took place February 14-16, in St. Louis, MO. B&B's twelve-page bi-monthly newsletter, B&B Worm Farms Report, pointed up the excellent environmental work the company said it was doing. B&B owners took great care in fooling many people.

We, too, were taken in by the Bradleys. Kelly's work for the company included writing an excellent growers manual, which they apparently used, and teaching vermiculture seminars for their growers. In February 2001, she joined the Board of Directors. Seventeen months later she would find out that the “corporation” hadn't even registered with the State, so she resigned. Once again, we're reminded that if it sounds too good to be true, it probably is.

Many thanks to our Cyber Worm for digging up these facts.