Friday, December 7, 2018

Promoter Surrenders Timber Commissions

Jackson broker Frank Zito surrendered commissions of $200,000 to Receiver Allison Mills in the Lamar Adams case.  Zito received the commissions after he sold shares in a Ponzi scheme based on phony timber investments. 


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, deeds, and promissory notes 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 320 investors of more than $164 million.  The Court sentenced Adams to serve 235 months in prison 

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.  Mills sued  to recover over $16 million in commissions from several "promoters". The promoters allegedly helped Adams sell his phony timber investments to unsuspecting investors.  The defendants are Michael Billings, William McHenry, and Terry Kelly as well as companies they own.  She has recovered over $2 million. 



Frank Zito was a broker at Merrill-Lynch from 2010 to 2018.  Merrill-Lynch fired him for conducting investing activities outside of his job without the firm's permission.   Adams paid commissions of $222,750 to Zito.  Ironically, Zito also bought shares in the Ponzi scheme and possessed a promissory note that went unpaid. The order states that Zito had only one client and that he introduced Adams to a "law firm" that provided "legal, business, and marketing services to Madison Timber." (KF: Start guessing).

Zito agreed to pay $200,000 to the receiver.  Mills said the payment reflects a 10% discount that is "fair."

Zito is currently employed at Coker Palmer.  FINRA's Brokercheck states that a complaint against Zito was submitted over the Lamar Adams case.  The Securities Law Attorneys Blog states:

In May 2018 a customer alleged Frank Zito, while employed at Merrill Lynch, sold investments away from the firm and made unsuitable investment recommendations from 2013 until 2018. The customer is seeking $571,000 in damages in the pending complaint. Post.
Mills said she is seeking the recovery of commissions from up to ten individuals. 

Earlier Posts
Lamar Adams swindled over $164 million from victims in Ponzi scheme.  
Billings Battles Receiver 
Receiver goes after millions in commissions in timber Ponzi scheme.  
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!!!




22 comments:

Anonymous said...

Once again we should commend Attorney General Jim Hood for the wonderful takedown of this Ponzi. Epps, Scruggs, Adams and the list goes on and on. Great job Jim!

Anonymous said...

Best part: “Mills said she is seeking the recovery of commissions from up to ten individuals.”

Wonder who they are.

Anonymous said...

Zito is a real brain trust - even as a licensed broker he also invested with La-mar. Will he be able to keep his CCJ membership? Asking for a friend.

Anonymous said...

How are the "attorneys" at BD still employed??

McHenry Denies The Allegations and The Alligator.. said...

From one of the related threads that are posted in the story:

"McHenry’s experience with and observations of Adams dealings with others gave McHenry the belief that Adams was a sophisticated, highly competent businessman who was reliable, honest and had integrity. Unbeknownst to McHenry, Adams exploited McHenry’s trust and confidence in his business acumen."

What a cocka-mamie bunch of bull-shit. McHenry is up to his eye-balls in this whole fiasco. Strike that...He is 'up to his balls in it'. These guys will double-bunk and share a stainless toilet.

Theca Jones of the Roguish Gent Podcast said...

I'm so glad that redneck swindled so many people.

Anonymous said...

Theca I agree they were either that greedy or dumb.

Anonymous said...

Well Melvin you first have to actually possess some money to get swindled. So you'll never have to worry about being a victim of that type of crime.

Anonymous said...

I know McHenry. He is smart, cagey, intuitive, and not easily duped. Also, this was not his "first rodeo."

Pappy Odaniel said...

@3:08 you have perfectly encapsulated the self-perception of every coat-tail riding, wanna be, CCJ member, last of the Northeast jackson dead-enders. And why it was so easy for an uneducated jakeleg timber man to swindle these people...well, Roger Wicker is in on it cashing his post-dated checks...and he’s smurt...I wanna be smurt too.

Anonymous said...

When will they release the names of the investors?

Anonymous said...

5:36....Why are the investors names important? Obviously they were duped or do you just like wallering in other peoples problems? Your life must be pretty miserable!

Anonymous said...

Why are y’all all so obsessed with the guys lack of a college degree?? There are rich and successful people without one… there are also plenty of people with advanced degrees in jail.

Anonymous said...

$200,000 - chump change. That's less than the buy-in at the CCJ (if you're not connected and don't have an address in The Belhaven).

Anonymous said...

6:10 Considering we're spending public money to recover private funds, I would argue that the public has the right to know. Save us some time and just tell us your name.

Anonymous said...

Many investors thought the fix was in, and their investment gar-un-teed - or at least protected through being connected - you better believe Wicker knew what was going on.

Eastland's Ghost said...

It's become popular to say our female senator is 'dumb as a box of rocks'. What about our male senator?

Anonymous said...

Our Senator is not dumb, greedy is another story.

Anonymous said...

Why is it greedy to expect a 10% investment return. I have enjoyed several.

Anonymous said...

"Theca Jones said...I'm so glad that redneck swindled so many people."

Please explain that post. Are you assuming all those swindled are white? Or are you just mired in racist supposition? And why would you refer to him as a 'redneck' unless you're a racist? No need to answer since we all know the answer already.

Anonymous said...

1:43 - obviously you aren't familiar with many of the Anon commentators on JJ. 10:19 probably just got home from working the night shift at Whataburger, and is jealous of anyone that might have a pot to piss in. The thought that somebody might have some money saved up in an IRA automatically makes them part of the greedy class.

Anonymous said...

Why all of the references to the CCJ?



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