Collection of posts on the Steadivest Case
The Clarion-Ledger reported on October 7 "The Madison County board of supervisors continues its search for a county administrator this afternoon as they conduct closed interviews with four candidates." JJ learned one of the names of the candidate interviewed. The name is well-known to those familiar with the Steadivest case: Jack Harrington. Mr. Harrington currently serves on the Board of Directors for the Madison County Economic Development Authority
Steadivest was an umbrella of companies operated by Marshall Wolfe and Jack Harrington. Patrick McCraney usually acted as attorney for the Steadivest "family". The Secretary of State shut down the companies in 2009 after charging Wolfe and Harrington with operating the Steadivest companies as part of a "ponzi scheme." The state fined Mr. Wolfe $850,000 and Mr. Harrington $170,000. The two appealed the case to Hinds County Chancery Court in January, 2011. However, Chancellor Mike Singletary ruled against the pair on April 24. The case is on appeal. The companies filed bankruptcy after investors sued and alleged fraud . However, the bankruptcy trustee filed a complaint against Mr. Harrington alleging fraudulent transfers and misrepresentations to investors took place. Mr. Harrington settled the case and agree to pay $150,000.
Steadivest was a collection of companies engaged in several activities related to real estate: mortgage lending, buying and selling properties, new construction, renovations, managing real estate portfolios, and selling promissory notes allegedly secured by real property to investors.
The Steadivest Companies and their officers were:
Steadivest Development: Marshall Wolfe (member), Jack Harrington (CFO, member)
Steadivest Capital, LLC: Marshall Wolfe (member), Jack Harrington (member)
Steadivest Contrarian Fund: Patrick McCraney (member),
Steadivest Properties: Marshall Wolfe (member)
Steadivest Lending: Marshall Wolfe (member), Jack Harrington (CFO)
Steadivest Resources: Jack Harrington (member, CFO)
Steadivest LLC: Jack Harrington (CFO)
MTW: Jack Harrington ( COO, President)
JJ reported in 2009:
The order states Steadivest is a "holding company that offers real estate investment, property management, and bridge loan lending". Unfortunately for Steadivest investors, the State also said Steadivest was an elaborate "ponzi scheme". Steadivest sold shares to investors, raising $1,585,000 and spelled out to them in a Private Placement Memorandum (PPM).Steadivest engaged in several suspicious transactions right before it filed bankruptcy. . JJ also discovered a warranty deed for a property in the Reunion subdivision in Madison County that was transferred from Steadivest to Jack Harrington, a member of Steadivest Capital. Post on possible shell games
A Private Placement Memorandum is "A legal document used in the private placement industry that gives investors details about a company’s business plan, investment information, and other pertinent details. Private placements are offerings of stocks or bonds that institutions or accredited, wealthy individuals may participate in, but which the public at large is excluded from." (Webster's)
Steadivest guaranteed the "investment funds would be held in escrow.... However, Steadivest failed to hold these funds in escrow." The State ruled Steadivest's actions showed "it had no intent to comply with the escrow terms" promised to investors. Steadivest would instead deposit the funds into its checking account where it was "commingled with Steadivest's operating cash" and that Steadivest used the investors' money to "pay bills and support the daily operations of the corporation."
Steadivest promised to maintain an open set of books that members could examine upon giving reasonable notice to the company. Unfortunately for the investors, Steadivest "never produced a single audited financial (statement)" and investors were never able to see the books.
The State stated Steadivest's presentations to the investors were of a "fraudulent nature" and that the escrow accounts were kept empty as the investors money was used to "prop up" the company instead of the intended purpose for the funds. Steadivest also used funds to prematurely pay off promissory notes held by Jack Harrington, a member of Steadivest.
Steadivest represented to investors the company was purchasing homes for a low price, renovating them, and then flipping them for a profit. The State said the figures used to show how this could make a profit for the company were "engineered solely for the purpose of fraudulently enticing investors." and that there were no profits made on these homes.
The Securities Division ruled "Steadivest mislead and deceived its investors in order to pay off mounting debt and keep its numerous subsidiaries afloat. In a "Robbing Peter to Pay Paul" Ponzi scheme, Steadivest mislead investors through a PPM (private placement memorandum which told investors where money would be spent) which Steadivest had no intention of honoring; through material misstatements of its CEO, Marshall Wolfe, and through material omissions in sales presentations and materials presented to its investors."
The State ordered Steadivest to Cease and Desist immediately from "further illegal activity". If Steadivest violates the order, the State can fine it up to $25,000 and imprison company officers up to five years in jail. Steadivest can request a hearing if it so desires. Earlier post
Bankruptcy Trustee Derek Henderson filed a complaint in federal court against Mr. Harrington in February 2011. Mr. Henderson stated Steadivest (the umbrella of companies will be referred to as just Steadivest) "received $284,000 and $200,000 from investors" in 2008. Steadivest transferred $475,000 of that money to MTW. The balance was $607,441. The company then transferred $306,302 to another Harrington-owned company, Equity Trust to "repay Harrington for an investment he made in MTW." Mr. Henderson said Mr. Harrington "should have known" Steadivest was insolvent when he received the money (translation: He looted the company.). Mr. Henderson charged he "defrauded Steadivest and the investors of Steadivest."
Then there is the Investlinc/TFS Income Fund, LLC. Steadivest Capital controlled the investment fund. Money was withdrawn from the fund and transferred to Steadivest Capital. SC's account balance went from $90,773 to $1,059,714. Investlinc was left with $352,357. Once those funds were transferred to SC, the company issued four checks to Mr. Harrington or companies he owned. The total withdrawals were $936,481. The trustee again charged Mr. Harrington knew or should have known the companies were insolvent when he transferred the money and he used "misrepresentation and fraud" to sell shares in Steadivest even though "he had a duty to investors and creditors to protect their interest."
The trustee asked the court to order Mr. Harrington to repay $306,302 and $936,481. The complaint also asked the judge to void several transfers it termed "fraudulent."
Mr. Harrington settled the case on November 13, 2012. He agreed to the following conditions:
*pay $150,000 at an interest rate of 8%
*$25,000 to the trustee within 14 days of the order
*$35,000 to the trustee within 6 months of the order
*Judgement attaches to several properties owned by Mr. Harrington (184 American Way, Madison, 105 Devlin, Madison, Virlilia Road, Madison County, 134 Market Ridge, Ridgeland)
SO...... the Madison County Board of Supervisors is interviewing someone for the position of County Administrator who engaged in ponzi schemes and investment fraud. The state fined him and shut down his company. He appealed to chancery court. The Chancellor agreed with the state. The bankruptcy trustee charged him with more fraud. He settled the case. Despite all of these problems, the county is actually considering placing him in a position to oversee tens of millions of dollars.
38 comments:
No shock here - no news. This is the Madison County Board of Supervisors operating as they did for the past several years. Tim (Elvis) Johnson still running things as he did before with his two cronies. Problem was, he had to find a third vote to partner up - just as he did a few years ago. Enter candidate John Bell Crosby, candidate for Mayor and no funds to take on the Queen. Elvis wanted to continue his ponsi schemes, so he bought him a third vote.
Now, Elvis (through his three cronies) is putting his buddy in a position to continue the raiding of Madison Countians' treasury. Crooks hiring crooks - what's the news story?
(Maybe Steen and Lott can find someway to stop this travesty. Otherwise, sit back and watch the armored trucks carry the tax dollars straight to Elvis and Rudy.)
BTW: Harrington at one time worked for Investlinc. Investlinc was run by Lee Paris. Birds of a feather...
Meanwhile down on Rudy's Farm...
So, John Bell is a Tim man??
John Bell is a Banks, Griffin Man who are Elvis men !!!! JBell went to the dark side to trade David Overby for the Tax Collectors and Tax Ass's bank building at Cobble Stone.
I believe JBell is pretty much done. I dont think he can get elected to the Supe board again.
Jbell went to the dark side and gave Banks and Griffin the votes they needed for the Lake and Park on Sulphur Springs if they would vote for the building and get rid of Overby to piss Steen off.
This Board needs competent leadership. Police Lieutenant Robert Graham has just purchased nineteen acres in rural Madison County.
Steen tried to stop the Getald Barbour from getting in that building. And look what happened. He lost 2 of his little cronies. Steen is done. And I am one of many that is making sure he stays done. Steen stepped into the big weeds when he messed with Gerald Barbour. And to make sure he knows where his place is we are going to put a little icing on the cake just to make sure he understands.
County paid way too much for the building. 2.3 million. Gerald Barbour had it appraised for $1.4 million on tax rolls. Perhaps Barbour will get some low interest financing on his next real estate purchase.
We're getting away from the subject here.....Its just like a bunch of elected Bozos to interview a KNOWN crook for the administrators job.
A little burb yall may not know.....The county HR Director that resigned a couple weeks ago was an Elvis girl!! She is the sister of that Murphy woman Elvis had a fling with 7 or 8 years ago. She hand picked all four of the people that the supes are interviewing. So you can rest assured King Elvis will be happy with whom ever of the four the supes pick!!!
We appear to be not far from Hinds BOS . The only question is who is the Stokes equal? Bag Boy Crosby could be the white version .
Don't give Steen a pass--He is no good guy on a white horse--He made the motion to raise out taxes and hire Rudy--He also voted for sulphur springs park--Steen is running around doing damage control!! He will be the third vote after John Bell loses!! Just let him get reelected and you will see the old Steen reappear--All bases are being covered to get the heat off of Steen so he can slide to victory in the next election!! Dont let Steen fool you!!
6:54, you are way way off. Elvis ran her off because she found some cheaper insurance premium. and he would be cut out of the commission's. However, John Bell is pushing Herrington because Elvis told him to. JB removed his family jewels and gave 1 to Elvis and 1 to Banks.
Dammit, you know I can't approve that comment.
But boy, it WAS good.
You have to admire the big E and his creativity, the name of his insurance agency is "Integrity Group".... go figure, now ain't that a misnomer...
Makes one wonder, did TJ bring long time partner/girl friend??? (we'll call her Dolly Parton), in to write health insurance while he was still a member of the BOS? If so, did he get a brib...oops commission....
I have heard the then HR director (Lisa ?), was fired for revealing that County was paying $100,000.00 per year more than they should have been for health coverage and Integrity got a 3yr exclusive contract for this service....
TJ, who had been in stealth mode, panics and gets Dolly to hire Danks to threaten BOS to keep contract in force...
Texas A&M and Seattle Seahawks have their 12th Man... Madison BOS has its 6th Man... Elvis has not left the building.....
News flash.. Rumors FBI as well as IRS continue white collar crime investigations in Madison County, especially after rumors of pending Gulf Coast indictments that have Barber and wife in tizzy....
This must have Elvis wanting to exhume Dr. Nick for needed "nerve calming medication" and JBC filing papers for a name change to JBJ...
HR director wasn't fired. She found another job (probably better) after she took a lot of heat for exposing the corruption of elvis and dolly. good for her.
Shelton better watch his back. You know they gonna be after him too soon as they get another low life in administrater job. Got rid of Overby then ran off HR. SV won't last long if he keeps trying to do right thing. TJ won't have that
The Human Rescourse girl cut a deal to leave- Another job waiting in the wings--She uncovered no corruption!! She is Elvis' sidekick and always has been and always will be-She did Elvis' bidding the entire time he was on the board--Someone better check insurance fraud! There is something hidden--
The HR director quit when she learned the spotlight was on her for allowing the awarding of benefits to independent contractors. That is a violation of IRS rules. She didn't start it but she damned sure allowed it to continue on her watch. The county faces a substantial penalty for that when the whole thing is said and done. If it were the private sector, her head would have immediately rolled over that. She might have ridden IN on a white horse but she didn't ride OUT on one.
Do you really think she had a choice but to allow it?
Extraordinary reporting, KF.
How has Mayor Mary not gotten Tim,yet??
Just checked the SOS office thought you were kidding about the name of Elvis and Dolly's insurance company... you nailed it... Good job
HR is a pawn just like every other county employee. BOS is as corrupt now as when Elvis was running things. oh wait... he still is. JB will always be his boy. Even if HR knew anything (not saying she did), she couldn't have done anything about it anyway. She didn't have any more power or control than the ladies that clean the offices. And the point of KF story is County Administrator - not HR. But leave it to a bunch of haters to lose sight of the real problems.
KF, why don't you start a pool and let people pick the name of the first snitch in this maze of corruption who will rollover for the Feds.. The jackpot could be equal to all the money these crooks have stolen from the citizens over the years. Probably better than winning the lottery but in this deal the winner has to give it all back to the county boo hoo...
There is another thread here. I know that in the last few years Elvis teamed up with a well known political operative, (his initials are GB), from Hinds County to pull some shenanigans. I don't see any way GB is not on the Elvis team. So where is GB in all this?
Guess that was my comment not approved. LOL well can't blame a girl for trying. Anyhoo, Steen was having a good ole time at Mad BOS till he stuck his nose in Gerald Barbour Biz. and Gerald has been clipping his ass ever sense. And why after the BOS fired their political consultant did the Mad Sheriff office keep them on the payroll. What the bleep does the MCSO need with a political consultant? Maybe because most of the deputy's now hate the boss????
9:44 asks: "Do you really think she had a choice but to allow it?"
Of course she had a choice. No HR professional worth his/her salt participates in the continuation of ongoing violation of federal law.
She was complicit to say the least. And that constitutes dishoner to the profession. No different from a lawyer being told to violate his code of ethics by a senior partner or a teacher being told to pass students on in violation of school policy.
Being an Elvis impersonator or board member is not a profession. She studied to enter the profession and held a position requiring certain knowledge and ethical standards. She was in continual violation of professional ethics. And, if she has a conscience, she will 'pay for' that for a long time.
Great story Fish. How on earth can this go on?
Out of all this doom and gloom I see a bright spot and that is Lott who has not ponied up his vote for sale. He voted against hiring Rhudy, against giving Elvis and Dolly the insurance, against the tax increase, and if my memory serves me right, he voted against Barber's Taj Mahal. (BTW: be sure and compliment Gerald on his $3000 French Doors when you go in to pay your taxes...oops I guess those are our doors now.) To Lott's credit, it appears Queen Mary has not been able to get her claws into him or control him... actually I don't think she likes him...or did I not get the jest of the NS Sun article?
KF I agree great story... Will you explain this for me; if Elvis hates Queen Mary and the feeling is mutual, and she hates JBC but Elvis loves JBC, why would Elvis have Dolly hire the Queen's attack dog DD to represent "Integrity" at the hearing about the insurance contract? I know "politics makes strange bedfellows" but how big does this bed have to be?
9:29, in the interest of English 101, can you please diagram that sentence?
4:43, I'll diagram it if you will answer the question?
I can't. I don't know who DD and Dolly are. Sorry.
7:40pm That's easy for me and I believe hard for you... Dolly is Debbie Judon, of the Integrity Group,(no pun intended), long time personal/professional associate of Elvis, and DD is the Honorable Dale Danks... That was easy but I don't think the answer to my question will be that easy but please try...
I have the answer to your question. Since the 'political bed' is simply an illusory euphemism, how big one must be is left entirely to the imagination.
Dale is a small man though and Timelvis's feet hang off the end, but Bag Boy will require enough room for three normal fellows, so let your imagination run wild.
Harrington got his million bucks out of Steadivest when he knew it was broke and going down the tubes and didn't tell a single investor---why didn't the board interview Marshall Wolfe too and then the board could open the interviews to any scam artist in Mississippi?
Post a Comment