Mississippi businessman Arthur Lamar Adams has been sentenced to 19.5 years in prison in connection to charges he operated a $100 million Ponzi scheme, according to a report by the Clarion Ledger.
Mr. Adams reportedly pleaded guilty in May 2018 to one count of wire fraud in connection to allegations his company, Madison Timber Properties, operated as a Ponzi scheme in which he promised roughly 300 investors a return of 13% interest on their investments. His victims reportedly included a Hollywood producer, a doctor, a police officer, and US senator Roger Wicker. He had previously confessed to the FBI, according to the report, and claimed that “most of the investors were obtained through recruiters he paid tough some were through wealthy management companies.” Although certain of his investors were wealthy, others “put their life savings” into his care, “believing they were securing their future.”
One of his investors, a “disabled veteran… who used a walker to make his before the judge,” testified that the scheme cost his family—himself and his parents—a total of $1.2 million. “It left me in a terrible position,” he told the court. “It took most of what we had.”
Prosecutors said the financial losses resulting from Mr. Adams’ Ponzi scheme ranged between “$65 million and $150 million.” David Fulcher, one of the prosecutors, said that Madison Timber Properties represented to investors that they would receive interest on their investments, but they received neither interest nor profits. “It was all fraudulent transactions,” he said, according to the Clarion Ledger.
One investor has reportedly already commenced a lawsuit against Madison Timber Properties, Mr. Adams, and his business partner William B. McHenry. A receiver, attorney Allyson Mills, has been appointed by the court to seek recovery of “as much of investors’ money as possible,” according to the report, and has notified recruiters who solicited investors for the scheme that they will be subject to legal action if they fail to return funds to the scheme’s victims.
She has reportedly already filed lawsuits against several, according to the Clarion Ledger: “Michael D. Billings and MDB Group LLC; Terry Wayne Kelly Jr. and Kelly Management LLC; and William B. McHenry Jr. and First South Investments LLC.” Ms. Mills’ complaint alleges that they received a commission for each investor they directed to Mr. Adams’ company, with total commissions paid exceeding $16 million. While she has offered to suspend the actions against companies who agree to negotiate a settlement, according to the report, only some of the parties have taken the offer.