The law offices of Gana Weinstein LLP are investigating investor recovery options due to the alleged Ponzi Scheme orchestrated by Arthur Adams (Adams) and Madison Timber Properties LLC (Madison Timber) by The Securities and Exchange Commission (SEC).
The complaint against Adams and Madison Timber was unsealed on May 1, 2018 Mississippi federal court revealing the SEC’s fraud charges against the Mississippi company and its principal who has been accused of stealing from at least 150 investors in a $85 million Ponzi scheme. Adams and Madison Timber agreed to a permanent injunction, an asset freeze, and expedited discovery.
The SEC’s complaint alleges that Adams misled investors by telling them that their money would be used to secure harvest timber rights from land owners in several states. The SEC alleged that Adams promised investors annual returns of 12-15%. However, Madison Timber is accused of never having obtained any harvesting rights at all. Instead, Adams allegedly forged deeds and other documents to purportedly reflect the value of the timber on the land. The SEC also alleged that Adams paid early investors with later investors’ funds and convinced other investors to roll over their investments and remain invested in the scheme. Adams is also accused of using investors’ money for his own 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. Also in May 2018 Adams plead guilty to charges of wire fraud involving the Ponzi scheme which ensnared investors at least 14 states.