A federal court in Jackson, Mississippi unsealed the SEC’s previously filed fraud charges against a Mississippi company and its principal who allegedly defrauded at least 150 investors in an $85 million Ponzi scheme. The defendants agreed to permanent injunctions, an asset freeze, and expedited discovery.
The SEC’s complaint claims that Arthur Lamar Adams told investors that their money would be used by his company, Madison Timber Properties LLC, to secure harvest timber rights from various land owners located in Alabama, Florida, and Mississippi, and promised annual returns of 12-15 percent. But Madison Timber never obtained any harvesting rights.
According to the complaint, Adams allegedly forged deeds and cutting agreements, as well as documents purportedly reflecting the value of the timber on the land. The SEC claims that he paid early investors with later investors’ funds and convinced some investors to roll over their investments, while using their money for personal expenses and to develop an unrelated real estate project.
In a parallel action, the U.S. Attorney’s Office for the Southern District of Mississippi announced criminal charges against Adams.
The SEC’s complaint charges Adams and Madison Timber Properties with violating the antifraud provisions of the federal securities laws. The court granted the SEC’s request for an asset freeze and ordered Adams to surrender his passport. The defendants have consented to the entry of the court order.