Wednesday, October 3, 2018

SEC Receiver Goes for All Commissions Paid in Timber Ponzi Scheme

The receiver in the Lamar Adams ponzi scheme case sued  to recover over $16 million in commissions from several "promoters" in U.S. District Court Monday.  The promoters allegedly helped Adams sell his phony timber investments to unsuspecting investors.  Prominent among the defendants is former Lord Snow employee Mike Billings although Lord Snow is prominently mentioned in the complaint.  Receiver Alysson Mills also sued William McHenry and Terry Kelly as well as companies they owned.

The SEC accused Lamar Adams of operating a Ponzi scheme that defrauded 150 investors out of more than $85 million since 2005, in a lawsuit filed in U.S. District Court on April 20.   The SEC said Adams sold bogus timber rights and deeds guaranteeing 13% interest rates.  Mr. Adams pleaded guilty in U.S. District Court to one count of wire fraud.  The Justice Department said in that case Adams defrauded 250 investors of more than $100 million.  The Court postponed sentencing for Adams since he is cooperating with the government.

U.S. District Judge Carlton Reeves appointed attorney Alysson Mills to be the receiver in the case.  She will recover assets, distribute them among the victims, and provide progress reports to the court.  The receiver created a website that will provide updates on her progress.  The website is Madisontimberreceiver.com.

Receiver Allison Mills gave each defendant a chance to reach a settlement with the SEC.   McHenry and Kelly agreed to do so.  However, Billings did not settle.

The complaint makes it clear that Mike Billings was a star recruiter for the Ponzi scheme.  Billings' former employer, Lord Snow, doesn't escape the receiver's notice.  The complaint states:


Billings became a recruiter for Madison Timber by no later than 2012, while he was employed by Butler Snow Business Advisory Services, LLC (“Butler Snow”). Madison Timber paid Butler Snow a monthly retainer for “strategic business development, strategic financing/capital strategies and overall management advisory” services. Butler Snow and Billings introduced Madison Timber to potential investors and Madison Timber paid Butler Snow and Billings a “success fee” when an investor invested.

In December 2013, Billings left Butler Snow for the prospect of recruiting new investors to Madison Timber fulltime. Adams agreed to pay Billings 2%, and later 2.5%, of each dollar of each investment made by an investor that Billings personally recruited. In addition, Madison Timber paid Billings a fee of $10,000, and later $12,500, a month. These agreements were honored until the collapse of the Ponzi scheme in April 2018.

Among Adams’s “bird dogs,” Billings was a standout. On information and belief, when Adams met Billings in 2012, Madison Timber had annual investments of approximately $15,000,000. With Billings’s help, the Ponzi scheme ballooned. Billings targeted large investors in Texas and California, often dropping certain investors’ names to attract new investors. On information and belief, Billings personally “booked” more than $80,000,000 in investments in 2017 alone. Billings was always hunting for “more, and more and more!!”

Ms. Mills digs the grave of guilt even deeper for Billings. Billings allegedly told investors the investments were secured by the timber deed.  However, Billings "knew or should have been aware" that he was perpetuating a fraud. The "landowner's signatures" on all the deeds looked the same as they were forged by Adams.  A call to any one of the landowners would have revealed the forgery.  Madison Timber had no contracts with timber mills yet Billings never attempted to verify the existence of the contracts he claimed existed.  Madison Timber made the investor agree to not record the deed at the courthouse unless the company failed to make a payment.  The interest rate was 300-400% above comparable investments.  The market price for timber was substantially lower than the price advertised by the Adams and his boyz.

Billings also was the financial "guru" at Butler Snow and was thus "paid to understand" the business of Madison Timber.  Billings couldn't brag enough about his partnership with his fellow fraudster:

In  August  2017,  Billings  celebrated  his  “fifth  anniversary”  with  Madison  Timber.   He thanked Adams for the “exceptional association and collaboration” and said “it is truly amazing what we have accomplished together.”  He reflected: “I can’t decide whether ‘The Odd Couple’, Grumpy Old Men’ . . . or at this point perhaps just ‘Big’ would be the best title to describe us. .  . I can only conclude that it is ‘A God Thing’!!”

The complaint also states that Billings and MDB Group received Madison Timber commissions of $3.5 million between 2013 and 2018.  However, Ms. Mills is not through skewering the defendants in her complaint as she moved on to Terry Wayne Kelly:

Kelly sold Madison Timber investments as early as 2010. Madison Timber paid Kelly 3% to 3.5% of  each dollar of each investment made by an investor that Kelly personally recruited, and 1%  to  1.5%  of  each  dollar  of  each  investment  made  by  an  investor  that  Billings  personally recruited. On information and belief, the agreement was not committed to writing but was honored  until the collapse of the Ponzi scheme in April 2018.

Between 2010 and April 2018, Kelly sold investments in Madison Timber to dozens of investors. In  exchange, he and Kelly Management received Madison Timber “commissions” of not less than  $9,674,615.  On information and belief, out of the “commissions” Kelly Management received, Kelly Management paid a total of $1,456,811 in “commissions” to sub-recruiters during the  same  time  period.   Accounting  for  “commissions”  paid  to  sub-recruiters,  Kelly and  Kelly Management received net “commissions” of $8,217,804.
and finished up with Michael Henry and his company, First South Investments.

McHenry sold Madison Timber investments as early as 2010.   Adams agreed to pay to McHenry 10% of  each dollar of each investment made by an investor that McHenry personally recruited.  On  information and belief, the agreement was not committed to writing but was honored until the  collapse of the Ponzi scheme in April 2018.

Between  2010  and  April  2018,  McHenry  sold  investments  in  Madison  Timber  to  approximately  twenty  investors. In  exchange,  he  and  First  South  received  Madison  Timber “commissions” of not less than $3,473,320.
 Henry sued Adams in Madison County Circuit Court for $10 million and claimed he was duped.   Ms. Mills asked the Court to return all commissions and fees paid to the defendants.   She also asked the court to freeze the assets of MDB Group.

Attorney Andy Taggart represents Billings.  

Earlier Posts
Receiver records $2 million.  
Lamar Adams Sentencing Postponed 
 Federal Home Cooking in Lamar Adams Case? 
Tree Falls Against Pinnacle in Lamar Adams Case 
WSJ Blasts Judge Reeves in Lamar Adams Case 
Judge to SEC & SOS: Not so Fast 
McHenry sues Lamar Adams, claims he was duped.  
A look into how the timber scheme worked.
SEC opposes Delbert's opposition.  
 SEC wants receiver in Ponzi scheme case, Delbert opposes.
Victim sues Timber Trolls 
Lamar Adams pleads guilty.  
SEC: Ponzi scheme began in 2004. 
Flashback Friday
Clearcutting the timber. 
Wicker wobbed in Ponzi scheme.
Pinnacle Trust issues statement on Ponzi scheme
Lamar Adams waives indictment.
Feds: Lamar Adams took over $100 million in Ponzi scheme.
TIM-BERRR!!!

Kingfish note: Will she go after the Baker Boyz? What about Lord Snow? Stay tuned.





65 comments:

Anonymous said...

Butler Snow is not named as a defendant. Amazing. Has it already cut a deal? Did Madison Timber pay the retainer to Butler Snow with money from the Ponzi scheme?

“I’m just downsizing” said...

Billings had a yard sale last weekend. I heard Louis Vuitton purses were going for pennies on the dollar and Prada slippers were 2 for $400

Anonymous said...

Don’t kid yourself 12:47, Lord Snow knows......Winter is coming!

Anonymous said...

The Baker Donelson & Pinnacle Trust guys skate on this fraud??

Winter is coming! said...

My guess is that there is much more to come...
Lord Snow and the Baker Boys are preparing for Winter...keeping lights on all night churning out those billings...

Daenerys Targaryen said...

I'm really burning about the Lords Snow and their role in all of this mess.

Anonymous said...

If they are smart, Lord Snow will immediately return every penny they made with interest. Also, this is why law firms should not be selling investments.

Anonymous said...

The claims against Seawright and Alexander are surely coming soon and will be very interesting indeed.

Anonymous said...

I thought the Receiver reported that the Baker firm did not receive any money from Madison Timber?

Anonymous said...

Miss Billings name dropping??? I can’t imagine him ever doing that. He only mentioned the Bush’s and VanDevenders fourteen times the first time I ever met him.

Anonymous said...

My first reading of your headline made me think A.J. Brown had done something...

I just adore a penthouse view said...

Maybe Billings can redecorate the prison with his fancy draperies, designer pillows and European wallpaper. Designer jumpsuits. Maybe his cell will be on the top floor

Anonymous said...

Law firms with investment advisory services, lobbying for a fee....no end to the lengths these money grubbers will go to pad their bulging pockets. Don’t look to the Bar to correct....they’ve been paid off too!

Anonymous said...

They were eating high on the hog, steaks, expensive fish, & the best treads money could buy.

I invested & now eating vinnia sausages, ramen noodles & saltine crackers.
My cloths are from goodwill. No lie.

You never can pin down a lawyer.

Anyone care for a vinnia sausage?

Anonymous said...

2:57, but did you enjoy those high hogs, nice steaks, and expensive fish when you were eating with them?

And don't know where you are buying your sausages, but hope they are close by on the shelf with the "vienna" sausages I've been eating for decades.

Anonymous said...

2:50, who at the Bar has been paid off and what is your proof?

Anonymous said...

3:07 Who in the hell changed my "e" to "i" & moved it in Vinnia?
Damn Democrats.

Thanks for the clarification said...

I always expected that Billings was a receiver.

Anonymous said...

How could Butler Snow get involved in this? "Success Fees????"

Anonymous said...

3:48 spoken like a true servant of the bar...must be in service to Lord Snow

Gimme A Damned Answer! said...

I have asked this question at least 25 times on this blog, have never gotten an answer, and will try one more time. Is the William B. McHenry mentioned in this mess the William B. (Bill) McHenry, age approx 72, from Greenville, Miss?

Anonymous said...

Is there a list of all of the investors anywhere?

Anonymous said...

Let me get one thing straight about Mr. Billings.....wait, did I say straight??

Anonymous said...

Ugh, just the thought makes my butthole cringe. Can’t imagine being one of the guys who benifitted from this assholes deception.

Anonymous said...

5:59......yes

Little Finger said...

Speaking of ButtHoles...when is the rest of sales team going to cringe?
Alexander & Seawright?

Anonymous said...

5:59, no I am not. Just as I thought, you have no support for your BS. Go back to your miserable life,

Anonymous said...

6:55. C’mon Bill. You’ve earned this. Man up!

60 year old virgin said...

Looks like they are finally getting to the bottom of this mess. Maybe the 60 year old virgin may lose his virginity.

Anonymous said...

I find it interesting that Mike Billings could not have been more visible when he was trying to push this scheme to everyone in town. He approached me at least twice, told me all about his condo in Dallas, his place in Los Angeles and his trips to Cabo. Then proceeded to tell me every wealthy person he knew. Now he’s nowhere to be found. Hello Mike???

The Girl with no name said...

What a cast of characters! Love the Game of Thrones references...
Come on JJ readers let’s name em!

The High Sparrow said...

Shame!

Anonymous said...

@2:23 PM, corner cell, top floor. Nothing but the best.

Anonymous said...

How bout Lamar as Walter Frey or Stennis Baratheon?

Yara Greyjoy said...

Mike Billings - Theon Greyjoy

I’ll get it next time said...

Before Billing started robbing the rich, he didn’t have two nickels to rub together. I’ve spent many a night watching him play Mexican Stand-off at Walkers once the bill arrived.

Anonymous said...

How could such smart people let a guy with high school education slick. Greed is a dangerous game. Can’t blame this on thugs these are the guys everyone praised

Anonymous said...

That’s what happen when you think you won’t get caught you get caught I bet they were known at local church as God fearing men

Anonymous said...

I don’t blame Him for doing what he did I blame the rich (investors) for being so dumb. I’m ready to see this on the TV show American Greed. That’s them dumb republicans at their best never get enough always want more.

Anonymous said...

Only one person named from Butler & Snow? Thought they had a passel of investment advisors.

Cersei Lannister said...

Don Clark = Tyrion Lannister

Anonymous said...

Sounds like another Haley deal gone south. Why hasn't anything happened about the KIOR plant in Columbus. I know MDA claims they are trying to collect - but from where? The KIOR plant was one of Haley's and Phil's baby. Hell - both of them has screwed over the state with these "economic ventures"! Just think if they had taken that money and invested in existing companies - that could in return hire more Mississippians to work and pay taxes. NO, Haley and Phil just flushed $75,000,000 down the toilet. Mr Auditor - do your job and take over the KIOR deal and demand payment. All MDA is doing is paying outside lawyers by the hour trying to collect something that is not there!

Separated at birth said...

After all this hoopla over Mike Billings, I googled him to see what he looks like. And damn if he’s not a dead ringer for David Gest, Eliza Minneli’s Husband.

Where's McHenry? said...

McHenry at 6:55...Please see post at 6:39. The question deserves to be asked and answered truthfully. How many 70-75 year olds named William B. McHenry could be residing in Madison County?

Anonymous said...

7:57 following that theme, who would my favorite, Tyrion be?

Anonymous said...

"How could such smart people let a guy with high school education slick. Greed is a dangerous game. Can’t blame this on thugs these are the guys everyone praised.October 3, 2018 at 10:10 PM"

How can smart people let a guy with a high school education...? Allow me to introduce to you Supervisors Steen, Griffin and Bishop in Madison County. They control quite a bit of our money and have quite a scheme going.

Anonymous said...

"Anonymous said...5:59, no I am not. Just as I thought, you have no support for your BS. Go back to your miserable life,
October 3, 2018 at 6:55 PM"

Bill? Is that you? Where is the BS in asking a legitimate question regarding the identity of an alleged criminal conspirator? What's miserable about the life of those who want to know the answer to that question?

Actually, if it's NOT you, you should appreciate the opportunity to clarify. I do see BS though....and it's YOUR post.

Anonymous said...

No way these law firms skate free. That would be like an insurance company having an agent lending money from their coffers and defrauding someone.

Anonymous said...

This investigation is going on until virtually all of the recovered assets are depleted via Attorney fees, expenses, travel costs, exorbitant printing and copying expenses, etc.

Anonymous said...

It would be interesting to know how much if any of Butler Snow's money or firm members money was invested in these schemes. If it were zero, that is a de facto
admission that they knew what this scheme involved. I know that if I believed this was viable, I would readily invest at the promised 12% or 13% rate.

Anonymous said...

"How could such smart people let a guy with high school education slick."

Let's see, the lawyers joined, the deal ballooned to 80 mil, the high school guy is still "in charge" and the lawyers swear they didn't know. I wonder who outsmarted who...

Anonymous said...

Damn, there go those CCJ and hunting club memberships, and shopping trips to Paris.

Anonymous said...

8:11. There are plenty of examples....matter of fact i will be in town tomorrow night and will be glad to show you. Meet me at Koesters about 7 at the bar.

Anonymous said...

Attn 4:46 Are you paying for the meal at Koestlers? You sound mighty wealthy, or at least arogant enough to think you are.

Anonymous said...

My daughter is having to drive a FORD now because I invested with this man. Do you know how embarrassing this is at Ole Miss.

Anonymous said...

6:22. I never said I was buying you dinner....I’m sure your circle are used to being wined and dined on someone’s expense account. Only offering to give you what you asked for. Show up or shut up.

Anonymous said...

When are the yard sales of designer clothes, custom shotguns, jewelry, and season tickets going to take place? Advertising on e-Bay would be, well, so bourgeois.

Anonymous said...

Say someone invested in this scheme, then told a friend about it who then invested for himself. would the referring investor get a commission? did the success fees trickle down?

Anonymous said...

What kind of time in prison are these sales people facing, and when will they be formally charged?

Anonymous said...

What about the rest of the ponzi sales team?

Anonymous said...

What about the other salesmen?AlexanderSeawright?

Anonymous said...

Why isn't this being pressed with Wicker? How much, and who does he know is involved.....Surely he didn't deal with Adams personally....and is Wicker being protected? Obstruction?

Anonymous said...

Saw Adams mowing his lawn yesterday. Guess the lawn service is out.

Anonymous said...

Wicker was a victim.

Anonymous said...


Can't feel sorry for Wicker if he is a victim. Somehow a milk toast republican politician being suckered into a get rich scheme seems validating.

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