Arthur Lamar Adams of Jackson, who is charged with running a Ponzi scheme, has a change of plea hearing scheduled before U.S. District Judge Carlton Reeves May 9. His attorney, John Colette, says Adams will change his plea to guilty.
Fifty-eight-year-old Adams was released on a $25,000 bond and placed under house arrest with GPS monitoring May 1, when he went before U.S. Magistrate Judge Linda Anderson Tuesday for his initial appearance and arraignment.
He is charged with two counts of wire fraud involving a scheme to defraud investors, and one count of bank fraud, all in connection with a Ponzi scheme using Madison Timber Properties, LLC. The company is owned by Adams.
Adams could face up to 20 years in jail for each count of wire fraud and up to 30 years for the bank fraud charge.
Attorney John Colette represents Adams and said he was pleased with the way the initial court appearance ended.
"I'm satisfied he was placed on bail and released," Colette said. "We pled not guilty to the charges and will proceed along with the next court hearing."
A date has not been set for Adams next court appearance but Colette said they plan to meet with the U.S. Attorney's Office to review the evidence and sort through documents.
U.S. Attorney Hurst made a statement on the case; “Greed is not good. Greed drove this individual to lie, cheat and steal from fellow Mississippians, and led him to prey upon others outside our state, simply to personally benefit himself. While this may be one of the largest Ponzi scheme ever committed in our state, our citizens can rest assured that these criminal actions by this defendant sadly affecting so many people will be met with swift and certain justice."
The investigation revealed that from 2011- April, 2018, Adams devised a scheme to defraud investors by soliciting millions of dollars of funds under false pretenses, failing to use the investors’ funds as promised, and converting investors’ funds to Adams’s own benefit without the investors knowing.
Adams then took the funds invested and used them for his own personal benefit and for other purposes that he did not share with investors, which included making payments due and owing to other investors, thus perpetuating the Ponzi scheme.
Adams fraudulently obtained over $100 million from more than 250 investors in at least 14 different states.
As part of the scheme, Adams falsely represented to investors that Madison Timber Properties was in the business of buying timber rights from landowners and then selling the timber rights to lumber mills at a higher price.
The object of the scheme was to cause individuals to invest in loans that were for the purpose of financing contracts for the purchase of timber rights to be sold to lumber mills at a higher price.
However, neither Adams nor Madison Timber Properties had such timber rights or contracts with lumber mills, except in only a few instances. Adams entered into fraudulent investment contracts with investors, most often in the form of promissory notes on behalf of Madison Timber Properties.
The loans typically guaranteed investors an interest rate of 12-13 percent, with the interest to be repaid to investors over the course of 12-13 months. The monthly payments due on these promissory notes were typically due on either the first or the fifteenth of the month. Adams created false documents causing investors to believe that their investments were secured by sufficient collateral from which they could recover all or part of their investment in the event that Madison Timber Properties defaulted on the loans.
Specifically, Adams created false timber deeds purporting to be contracts conveying timber rights from landowners to Madison Timber Properties. Adams forged the signatures of landowners and also created false timber deeds purporting to convey timber rights from Madison Timber Properties to the investors.
Adams even had many of the documents notarized to make the investments appear legitimate.
He required the investors to agree not to record their timber deeds unless Madison Timber Properties defaulted on the loan agreement by failing to make a payment. In many instances, Adams also provided a “timber cruise summary” purporting to state the value of the timber located on a particular parcel of land. These “timber cruise summary” documents were also false and had been created by Adams to induce investors to give money to Adams under false or fraudulent pretenses. Investors are requested to gather and retain any documents that they have concerning their investments with Madison Timber Properties, LLC and/or Arthur Lamar Adams.
Information about developments in this investigation and further instructions on how to provide information to the pertinent authorities will be provided at the earliest possible date. According to the Attorney General's Office, the FBI and the U.S. Attorney’s Office will be reaching out to identified victims shortly.
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