November 9, 2018/US SEC
On October 30, 2018, the principal of a Mississippi company charged by the Securities and Exchange Commission with fraud for allegedly bilking at least 150 investors in a multimillion dollar Ponzi scheme was sentenced in a parallel criminal action to 19.5 years imprisonment.
The parallel criminal action arose from the same facts and circumstances alleged by the SEC. The SEC alleged that Arthur Lamar Adams lied to investors by telling them that their money would be used by his company, Madison Timber Properties, LLC, to secure and harvest timber from various land owners located in Alabama, Florida, and Mississippi, and promised annual returns of 12-15%. But Madison Timber never obtained any harvesting rights. Instead, Adams allegedly forged deeds and cutting agreements as well as documents purportedly reflecting the value of the timber on the land. Adams also allegedly paid early investors with later investors’ funds and convinced investors to roll over their investments. According to the complaint, Adams used investors’ money for personal expenses and to develop an unrelated real estate project. In the SEC action, Adams has consented to a permanent injunction, an asset freeze, and expedited discovery. The court overseeing the SEC action has appointed a receiver. The receiver has established a website, which contains information on the receiver’s progress and on any relevant federal or state proceedings.
The SEC’s investigation is ongoing. The SEC strongly encourages investors to check the backgrounds of people selling them investments by using the agency’s Investor.gov website to quickly identify whether they are registered professionals.