| The Story Starts in 2018 Lamar Adams operated companies claiming to invest in timber-related activities. He operated a variety of Timber investment companies in the area. These are not companies that own, harvest or process timber. They are investors who seek opportunities to make money off timber companies who need funds to operate and pay interest for the use of the funds. Theoretically, the gains would be relatively short-term since the timber companies would know the timber that was available and how long it would take to harvest. It should be a pretty safe bet. The victims were promised a 13% rate of return on their investment. They were issued twelve signed checks that were post-dated over a period of thirteen months. Each check had a stated amount and a total yielding 113% of their initial investment. The investment company had been in business for seven years, so it seemed reliable. Furthermore, some victims knew people who had actually received the interest payments as promised. Sounded like a good deal. Adams used several individuals, referred to as “promoters” to sell the “investments.” The well-to-do of Mississippi were the main targets. Many of the members at the top of Jackson society were hurt. One alleged victim lost $2 million. Another lost $350,000. A family of investors said in total they had several million dollars invested in these funds. One particular law firm was hit hard as many of the lawyers fell for this scheme. On October 1, 2020, the SEC receiver sued to recover over $16 million in commissions from several of these “Promoters.” Lord Snow is prominently mentioned in the complaint although there were others. The SEC accused Lamar Adams of operating a Ponzi scheme that defrauded 150 investors out of more than $85 million since 2005. Adams pleaded guilty to one count of wire fraud. Adams’ sentencing was postponed since he was cooperating with the government. Attorney Alysson Mills was appointed receiver in the case. As receiver, she was charged with recovering assets, distributing them among the victims, and providing progress reports to the court. Mills gave each defendant a chance to reach a settlement with the SEC. Although McHenry and Kelly agreed to a settlement; Mike Billings did not. Billings was the star recruiter for the Ponzi scheme. His former employer was Butler Snow Business Advisory Services, LLC. When Billings left Butler Snow in December 2013, he began working for Madison Timber full time. With Billings’ help, the Ponzi scheme ballooned. Billings personally “booked” more than $80 million in investments in 2017 alone. Billings stood out as one of Adams’s promoters. He told investors the investments were secured by the timber company. The “landowner’s signatures” on all the deeds looked the same as they were forged by Adams. A call to any of the landowners would have shown the fraud. There were no contracts with any mills. The investors had to agree not to record the deed at the courthouse unless the company failed to make a payment. The interest rate was 300-400% above comparable investments Adams and Butler Snow worked together from 2011 to 2018. Butler Snow personnel allegedly pitched timber investments to its clients. At the same time, Baker Donelson, lawyer and lobbyist, pitched investments to Baker Donelson clients as unlicensed brokers. Essentially, he was using his firm to promote their private business to clients. Butler Snow’s lawyers were charged with violating the Mississippi RICO Acct. Snow shifted the blame from himself by suing the lawyers with attorney malpractice. Eventually, Alysson Mills sued the two prestigious law firms (Butler Snow and Baker Donelson) to recover commissions paid to the lawyers in the Lamar Adams timber fraud. Although none of the players were ever officially registered as brokers nor did they register with the SEC, pitching investments to investors is exactly what brokers do. In Ms. Mills case, the Receiver said Thornton, Billings and Butler Snow “acted as unlicensed brokers, in violation of federal and state law.” She goes on. The team cashed the checks while doing little to earn them. No one at the law firm even performed a “cursory inspection” of Madison Timber. Such an inspection would have unearthed that the company was bogus. Billings was making so much money off of the timber scheme that he left Lord Snow in December 2013 and began working directly for Lamar Adams. Adams stopped paying the $3,500 monthly retainer fee to Lord Snow, yet he still engaged Snow to assist him in other projects. Snow continued to bill Adams for services rendered after he was caught. He finally terminated the relationship on May 11, two days after he pleaded guilty and 11 days after he was indicted. As for Baker Donelson, his team specifically targeted individuals who had recently sold assets because they knew those individuals had money to invest. Ms. Mills claims victims “reasonably believed” their investments in Madison Timber were backed and promoted by and had been vetted by Baker Donelson. Donelson bragged about the company’s investment expertise on its website. Meanwhile, between 2011 and 2018, the promoters withdrew $980,000 from the fund representing their “shares of investors’ returns. In addition, Adams separately paid them over $600,000 representing undisclosed “bird-dog fees.” That’s not counting the cash bonuses they received. They acted as unlicensed brokers, a violation of state and federal law. Two of the main players at Baker Donelson, Alexander and Seawright, were doing so well they decided to step it up a notch. They started their own company and developed a five-year model instead of a ten-year model. They started pitching to accountants, investors, and financial advisors. They implemented a non-disclosure agreement to ensure their new clients didn’t catch on to their scheme and try cutting them out of the middle. They had trouble finding investors who quickly realized they had no “skin in the game.,” They finally attracted a Baker Donelson client who had just sold a major asset. The “key investor placed $6 million in the fund. Just days before Alexander and Seawright would have deployed their “key investor” and client’s money, Adams turned himself in. Their key investor sought more information about the indictment. Even though they tried to distract the client from their own role in this scam by claiming they were victims as well, the investor backed out. The counts in the case included: *Conspiracy to help Lamar Adams sell phone timber investments: All defendants. *Aiding and Abetting: All defendants. *Gross Negligence: All defendants. *Violation of Mississippi Fraudulent Transfer Act: Butler Snow *Advisory, Thornton, Alexander. Seawright. *Violation of Mississippi RICO Acct: Butler Snow Advisory, Thornton, *Alexander Seawright, Alexander, Seawright. *Joint Venture Liability: Alexander Seawright, Alexander, Seawright *Attorney Malpractice: Butler Snow *Negligent Retention and Supervision: Butler Snow, Baker Donelson The complaint also charges Butler Snow is liable for the acts of Butler Snow Advisory. It asks the Judge to declare Lord Snow liable for all damages caused by Butler Snow Advisory. The same is asked for Brent Alexander and Jon Seawright concerning Alexander Seawright. The Receiver closes with a request to declare Baker Donelson vicariously liable for all damages awarded against Seawright and Alexander. Stay Tuned! |
