And the Beat Goes On

And the Beat Goes On
Between 2010 and 2018, Lamar Adams continued his fraud scheme by tapping the Ole Miss network.

In March 2019, Receiver Alysson Mills sued Ole Miss quarterback Stewart Patridge, his mother Gee Gee Patridge, Jason Cowgill, Martin Murphree, Mutual of Omaha, and Bankplus, in an effort to recover funds for victims of Lamar Adams’ newest fraud scheme using his company Madison Timber. The scheme case amounted to $164 million from phony timber investments. Commissions from the scheme amounted to not less than $9,674,615.

Here’s how the players worked together:

Gee Gee Patridge was Bankplus CFO. Although Gee Gee Patridge only invested in Madison Timber until 2014 and received payments until 2015, she continued to provide advice about potential investors to her son who continued the fraud, sometimes even working with Baker Donelson to share potential clients.

Stewart Patridge (Gee Gee’s son) and Wayne Kelly were childhood friends and college roommates. Stewart was a starting quarterback for the Ole Miss Rebels football team. Kelly and Kelly Management utilized Stewart to recruit for him. Stewart received net “commissions” of $8,217,804. Kelly Management settled the case for an estimated $2 million.

In an effort to get additional clients, Kelly left Bankplus at the end of 2011 and joined Mutual of Omaha. Stewart and former Bankplus employee Martin Murphree opened a Mutual of Omaha office in Desoto County. Stewart and Murphree used the office of their friend, Jason Cowgill, the Bankplus branch manager to meet with Madison Timber victims even though they no longer worked for the bank. Kelly in turn paid them commissions.

Bankplus and Bankplus employees were charged with substantially assisting by recruiting new investors, lending their influence, serving as a reference to potential investors, lending their resources (e.g., office space, facilitating transactions, and facilitating transfers or “loans.” All of that masked Madison Timber’s insolvency – a similar pattern to the law firm’s involvement.

Bankplus was also accused of looking the other way when it was warned about suspicious behavior by Lamar Adams and his forest of fraudsters. Although Bankplus denied any wrongdoing, Receiver Mills cited several emails to support her accusations.

Mutual of Omaha was held responsible for the lax supervision of Murphree and Patridge as they sold the phony investments.

The SEC Receiver Alysson Mills has made the following charges:

Civil Conspiracy: All defendants.

Aiding and Abetting: All defendants.

Recklessness, Gross Negligence and Minimum Negligence: All defendants.

Violations of Mississippi’s Fraudulent Transfer Act: Stewart Patridge, Jason Cowgill, Martin Murphree

RICO Violations: Bankplus

Negligent Retention and Supervision: Bankplus, Bankplus Wealth Management, Mutual of Omaha.

So How Did It All End?

It will take several years in the court system to work things out, and it is unlikely that the investors will get more than a fraction of their losses when all the smoke clears.

I did further research, to try to find out progress on the investigation and court proceedings. There has not been much written since 2018, but here goes:

I found an Associated Press article published on April 27, 2023, Brent Alexander of Jackson, MS, pleaded guilty to a federal charge of conspiracy to commit wire fraud for participating in a fake timber investment scheme that caused investors to lose tens of millions of dollars. The Judge declared no release from prison for the $100M Ponzi scheme mastermind due to the pandemic. Alexander and Attorney Jon Darrell Seawright of Mississippi had been indicted on multiple charges in an investment scheme that affected hundreds of victims across multiple states over a number of years.

Arthur Lamar Adams received nearly a 20-year federal prison sentence in May 2018 after pleading guilty to running the timber scheme in which investors lost $85 million. He admitted that between 2011 and 2018, he took part in a scheme to defraud investors by soliciting millions of dollars under false pretenses and failing to use the money as promised.

On August 22, 2019, the SEC filed a complaint in federal court in Jackson, Mississippi, alleging that Terry Wayne Kelly, Jr. of Madison, Mississippi, through his wholly owned entity, Kelly Management, LLC, provided false information to investors by telling them that their money would be used by Madison Timber to secure and harvest timber and promising annual returns of 12 to 15 percent. In truth, Madison Timber never obtained any harvesting rights; instead, Madison Timber’s principal, Arthur Lamar Adams, forged deeds and cutting agreements and used investors’ money for personal expenses and to develop an unrelated real estate project. Kelly continued to provide false information to investors, even after a financial institution confronted Kelly and Adam with questions about Madison Timber’s business practices. Madison Timber has been dissolved. 

According to the Clarion Ledger, in August 2019, three Texas religious organizations agreed to return more than $300,000 as part of a federal court’s effort to recoup money from Kelly Management. Berachah Church and R.B. Thieme Jr. Bible Ministries of Houston, Texas, agreed to return $280,530.50, which reflected 100% of the contributions they received from Adams and 95% of the contributions they received from Kelly. Rick Hughes Evangelistic Ministries Inc. returned cash contributions made by Adams and Kelly in the amount of $43,657.95, and Philippi Freedom Ministries returned $16,125. None of these churches were aware this was a Ponzi scheme.

There are other cases of individuals who were recruited as “promoters” who received commissions from the Ponzi scheme.

Some are indicted for fraud. Others were asked to return the money they earned in order to pay back at least a small portion of what the investors lost. Clearly, anyone can be targeted. 

Friend or Fraud: Looking for Signals of Ponzi Schemes 

All of these red flags were in this scheme: 

Abnormally high investment returns – How can some investment promoters guarantee a high return when mainstream financial companies don’t? They can’t. There can be high returns but not without risk. 

Guaranteed returns – Nothing is guaranteed. In a scam, a high return is pitched as low risk. The higher the return, the higher the risk. It’s just that simple.

Consistently high performance – The world changes, sometimes quite unexpectedly. There are no guarantees. 

Vague business model – If you aren’t permitted or are discouraged from verifying the details of a deal, it’s probably a scam. Investment agreements might prohibit signers from contacting any parties related to the settlement without written consent. Even so, check public records and confirm anyway. Call your state securities regulator (find them at www.nasaa.org. Make sure the person selling the security is licensed in your state. 

The investment is being promoted by people you trust – Con artists are masterful in gaining the trust of unsuspecting investors, sometimes even getting on their knees and praying with their targets to win them over. 

You are offered a bonus to sign up friends. If recruiting other investors is key, you could unwittingly become part of a scam.

Testimonials about big payouts. Scammers love it when early investors brag about their returns. It adds legitimacy to the swindle.

The promoter gets angry at too many questions – If they act angry or dismissive when investors ask questions that is a huge red flag. If you are ever made to feel stupid or are shut down from asking questions about an investment opportunity, you are most definitely about to be conned. 

Pressure to reinvest – If they are scammers, and you were caught once, they now know your profile and assume you can easily be caught again.

Pressure to act now – You should be allowed the time you need to make a decision.

Credibility through association – Just because your friend or family member recommended you for this opportunity, doesn’t mean that you are both being swindled.