- Receiver settles with Lamar Adams' children.
A federal judge found the Baker Boyz in civil contempt of court in the SEC's lawsuit against Lamar Adams. U.S. District Judge Carlton Reeves ruled on March 13 that Jon Seawright and Brent Alexander interfered with Receiver Alysson Mills' efforts to recover funds for victims of Lamar Adams' Ponzi scheme. Mr. Seawright is partner at Baker Donelson while Mr. Alexander is a lobbyist for the firm. The Court will determine the penalties for Mr. Seawright and Mr. Alexander at a later date.
U.S. District Judge Carlton Reeves appointed New Orleans attorney Alysson Mills to be the receiver in the case. She is recovering assets for distribution to the victims. 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. Ms. Mills also sued Baker Donelson and Butler Snow to recover damages.
Seawright and Alexander created a timber investment fund, Alexander Seawright Timber Fund I, in 2011 that would invest in Madison Timber. They began pitching the investments to Baker Donelson clients. Ms. Mills claimed victims “reasonably believed” their investments in Madison Timber and Alexander Seawright Timber Fund I, were “backed and promoted by, and had been vetted by, Baker Donelson.” Earlier post with copy of complaint and more information. Ms. Mills sued BD for conspiracy, aiding & abetting, gross negligence, and negligent retention and supervision.
The Baker Boyz maintain they didn't know the timber investments were part of a Ponzi scheme and they were defrauded as well. They pursued their own recovery against UPS.
The motion for contempt stated:
on October 30, 2018, Alexander Seawright Timber Fund, LLC, acting under the direction of Jon Seawright and Brent Alexander, purported to “release, acquit and forever discharge” three notaries, the UPS store that employed them, the UPS store’s owners, and the UPS store’s insurer from “any and all actions … in any way of [sic] growing out of … [specified] signed notarized documents” for the sum of $100,000...
Understandably, many investors would like to independently pursue claims against third parties such as notaries, law firms, and banks—but they have respected this Court’s stay, mindful that the Receivership Estate must be permitted to do its work first. The Court’s stay is intended to preserve assets that otherwise could be picked apart...
It is bold of Jon Seawright and Brent Alexander, themselves facing potential liability for their roles in the Madison Timber Ponzi scheme, to purport to release for the sum of $100,000 valuable claims against a UPS store whose employees notarized the fake deeds and promissory notes that Jon Seawright and Brent Alexander turned around and gave to their own investors...
Judge Reeves agreed with the Receiver:
Yet, respondents then asserted and settled a claim with a third party that the Receivership Estate also has claims against, all without ever seeking the input of the Receiver or this Court.3 They interfered with the Receiver’s job and diminished the value of potential Receivership Property, in violation of the Court’s Order. Therefore, the contempt motion is granted.
Meanwhile, the Court approved settlement agreements (posted below) between the Receiver and the children of Lamar Adams:
*Drake Adams and his wife received $56,000 and an interest in a home in Indianola. The couple will repay $40,000 for the cash gifts and $12,500 for the real estate interest.
* Foster and Brandon Kennedy received cash gifts of $152,470 and an interest in the Indianola home. Brandon Kennedy is the daughter of Lamar and Vicky Adams. The Kennedys will repay $105,000 for the cash gifts and $12,500 for the real estate interest in the Indianola home.
Related Posts
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Baker Donelson tries to clear cut Receiver's lawsuit.
More lawsuits coming in Lamar Adams case.
Wife's Tree Falls in Lamar Adams Case
Butler Snow Asks Judge to Dismiss SEC Complaint in Lamar Adams Case.
Jailbird
Ole Miss Repays Money in Lamar Adams Case
Receiver sues Butler Snow & Baker Donelson
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!!!
Posted Below
P.1: Settlement order for Drake Adams
P.6: Settlement order for Kennedys
P. 11: Order granting contempt motion
P. 20: Motion for contempt
52 comments:
Damn this is getting good!!!
"Hey mister, your stole is getting away, "
Pop some corn.....
I am sure glad that I bought stock in popcorn. The Bayer Boyz are the gift that keeps on giving.
Win!
The kids got off pretty good.
You know, sometimes you can't just take an armadillo, put it in the barn, light it on fire and expect it to make licorice.
Hory Sheeet Batman...these dudes have no shame!
If this is true, this is the most audacious act that I think I have ever heard of. Bar none!!!!!
Look at them roaches scurrying!
Now that BD has settled with UPS, does that mean they also have accepted any liability that UPS might have incurred? To a layman (me) that is what this looks like. I remember UPS wasted no time in settling this accusation.
Dear Layman
please read the article before you post.
BD hasn't settled with anyone
"If this is true, this is the most audacious act that I think I have ever heard of. Bar none!!!!!" - March 21, 2019 at 10:03 AM
I don't know which act you are talking about, but if anything in these filings and orders is the "most" anything you've ever heard of, you haven't heard of much.
"Now that BD has settled with UPS, does that mean they also have accepted any liability that UPS might have incurred?" - March 21, 2019 at 10:16 AM
Nope. In fact, it looks like the court will put Alexander, Seawright and UPS back where they were before the payment was made and release executed whether they want that or not - see the last sentence of the court's order granting the motion for contempt. When a judge writes something like that (or just says it, on or off the record), especially a federal judge, it is not an off-hand remark or suggestion.
To do what they did over $100K in a situation like this was certainly foolish and possibly an act of desperation (but as noted above, it wasn't the "most" of either or anything else). Yet again, certain parties and their attorneys seem oblivious to the forest because of the trees and will be given the opportunity to learn some very valuable albeit very expensive lessons. My guess is none of them will learn a single thing.
Those who delight in the misery of others are hopelessly miserable themselves.
I think the audacity was on the part of the attorney representing the investors of Alexander Seawright, which included himself. It looks like he went in and grabbed the money, and said "to hell" with everyone else, including the federal judge overseeing the case.
Judge Reeves noted in his order of contempt that the attorney, Kim Breese, may have been twice compensated, as he was (presumably) paid an attorney fee and also recovered as an investor in Alexander Seawright. I suspect Judge Reeves is now trying to figure out what to do with a senior attorney who has acted with such flagrant disregard for the court's order, and out of obvious self-interest.
And they keep their jobs?
Really?
Their liability carrier is about to drop them.
Do not know any of the Adams family, but curious as to why Foster and Brandon Kennedy get to retain a larger portion of their cash gifts than Drake Adams and his wife. Was this a percentage based recovery?
@ 11:48, I am most certainly delighting in all of this, and I am miles away from being miserable. Actually, I'm quite happy and content. But when folks like the Baker Boyz, who think that they are not subject to the same laws and rules that the rest of us have to abide by, get their asses in a crack, I take delight in it. It goes back to the age old lesson of knowing right from wrong and conducting oneself accordingly. I firmly believe the Baker Boyz knew what they were peddling was horse shit, and they deserve everything that they have coming to them, and more!! So if that makes me a son of a bitch, I can like with that..........and quite happily.
I find it interesting that they used a UPS notary when there are probably half a dozen or more notaries employed at BD. Did they not want to put their own notaries in a position to fraudulently notarize a fake document? Hmmm
12:53 just hit the nail on the head.
Attn 10:41 Are you still employed at BD? By the way, you seem a little sensitive. Not a good trait to expose, especially when you go to court.
Going ‘Over the Edge’ preview?
Adams used the UPS notary, not anyone at Baker, including Alexander or Seawright. Folks can look for ways to impute actual knowledge of Adams' scam to Baker as a firm, but you're barking up the wrong tree (and I don't work at Baker or know any of the parties).
1:10
Not a BD employee-
Just have enough sense to read the article before positing something clearly erroneous.
12:53 pm
Be neat to see if any docs were notarized by BD people?
And how does a member of the executive committee of a 500 man law firm who is supposedly super sophisticated in investments....allow a client to not record a deed which secured the collateral?
There is no way in hell he did not know this was fraud.
And if Seawright knew it was a fraud and kept putting Baker clients in the loop on this scam....BD has serious legal exposure.
That probably explains why Seawright is still employed at BD?
How many clients does BD have to lose before they shed this guy?
When does the ALAS policy rescind coverages?
When do the dec actions re coverage begin? (Answer - right after Reeves denies the motions to dismiss)
Don’t give up popcorn and coffee....this has Netflix series written all over it.
The only legal drama where all the people get served shit pies....
How can a notary be guilty of anything other than certifying that he/she witnessed a signature and viewed the ID proof of the person signing when he/she did not? A notary isn't responsible for the validity, accuracy or legality of documents upon which notarized signatures appear.
What am I missing here?
Popcorn and armadillos - This thread has been forced into the shitter.
1:48 PM
You must know a lot. I'm sure you aren't privy to divulge much sensitive information, like your Source. Your information could be off a bit and I'm not barking.
Here, here 12:48pm. I too enjoy justice. It isn't hating or being miserable that drives it. It is a sense of right and wrong and justice. I take equal pleasure in others' legitimate, earned successes as well.
The vast majority of the time, these crooks act holier than thou in public. That just makes it all the more enjoyable when their scams are exposed and justice is served.
2:39 PM asked, "How can a notary be guilty of anything other than certifying that he/she witnessed a signature and viewed the ID proof of the person signing when he/she did not? A notary isn't responsible for the validity, accuracy or legality of documents upon which notarized signatures appear.
What am I missing here?"
From the information I've seen, the notary at UPS - AT UPS, NOT BAKER - wouldn't be guilty of anything more. From the allegations made thus far, Baker, Alexander and Seawright had nothing to do with the forged deeds being notarized FOR ADAMS at UPS, NOT at Baker.
However, I haven't seen any information or allegation(s) at all as to the circumstances under which the forged deeds were notarized. If Adams simply duped yet another gullible person into doing something they should not have, that is one thing. If the notary accepted anything of value to improperly notarize the deeds, the notary (and possibly UPS) has some exposure. If the notary knew the deeds were forged and going to be used in the scheme, the notary is in real trouble but UPS would likely be off the hook. Why UPS quickly paid $100K is an interesting facet, but without more information there is no way to know why.
As I read this, Alexander Seawright pursued a claim against the ups notaries for those notaries’ improperly notarizing documents that Alexander Seawright and their invesors relied on. It says Adams coordinated those notaries.
Ups paid $100k. Notaries are only required to maintain $5k bonds. The fact that ups was willing to pay $100k says a lot. Perhaps I’m wrong, but this is more consistent with Alexander Seawright being defrauded than it is their being in on the fraud.
And they were found in contempt for cutting in line seeking money for defrauded investors, not for any finding of defrauding investors.
But their having an investor rep them is inexplicable.
Notary Public
Lawyers in big firms have staff who are notarys.
The staff member would know that a deed once notarized must be recorded to be of any use and the notary would usually record it.
Now a notary at the ups store would not send Seawright an email reminding him that the deed needs recording not would the ups notary ask questions after the fact.
It may cut both ways....Seawright used ups notary to hide scam....but Seawright knew it was a scam.
All we need after each motion is a voice over from Waylon reminding the audience that the Baker Boys may just get caught by the law.....
4:21 PM wrote, "Ups paid $100k. Notaries are only required to maintain $5k bonds. The fact that ups was willing to pay $100k says a lot. Perhaps I’m wrong, but this is more consistent with Alexander Seawright being defrauded than it is their being in on the fraud."
As to the $5K requirement, that sounds right, but just like with auto insurance, lots of people carry more than the minimum. I don't know, but it wouldn't surprise me to learn that a notary working for UPS had excess surety. The cost was likely 1% or less, so the annual difference between $5K and $100K wouldn't even be a rounding error for a UPS store, much less UPS corporate and even if it were 1%, even a sketchy claim would make $950 seem like pocket change.
As to speculation that Seawright didn't know Adams was running a scam, with nothing more than the various filings and published information, I'd agree. His not knowing it was a scam doesn't get him (or Baker) off the civil hook even if it does help him avoid a stay at the Graybar Hotel. On the other hand, I'm not sure what is worse for a partner at a firm like Baker, being that crooked or being that stupid; either way, I don't see a bright future for him there or at any remotely similar firm.
There is a whole lot of fail in these comments.
My take on it is the notary is liable because they notarized the signature of the purported land owner who was not there or was Adams in disguise. Adams probably brought the deeds already signed and just had the notary handle. UPS is liable under respondeat superior.
Seawright was not notarizing anything, and neither was Baker. Butler Snow may have, we shall see.
King - I'm confused as to why the notaries were liable in this case.
Could you start a separate thread as to their liability?
Lawyers in big firms have staff who are notarys.
The staff member would know that a deed once notarized must be recorded to be of any use and the notary would usually record it.
BS.
Go to law school. A deed does not have to be recorded to be valid. Recording a deed gives notice. It has nothing to do with the validity of the document. Yes, it is a good idea to record a deed. But it isn't necessary to record it so it can "be of any use."
I don't work for BD or anyone associated with this mess. But stupid statements like this shouldn't be posted.
Real estate Lenders don’t record deeds?
Wow.
That’s news to me.
My bank recorded the deed to my house the day of the loan.
Timber deeds are interests in land and are recorded all the time.
To claim a legally recognizable interest over any one else a deed has to be recorded and recorded ahead of any other deed.
To be able to foreclose on an interest in real property there must be a recorded deed.
I was never approached to invest in this scheme but if someone said give me $100k and I’ll give you an unrecorded deed to timber I would have laughed the guy out of my office and started an email chain and video lambasting the guy so hard it would have been # 1 on YouTube.
Please don’t give money to anyone who says a deed of trust for an interest in real property doesn’t have to be recorded to protect your rights in the collateral.
11:12 PM - I did go to law school and yes you must file a deed. As 3:23 am put it correctly, the bank will not be able to foreclose. It is called NOTICE AND PRIORITY!
Additionally, how would one know that you have title to land if it is stuffed between your mattresses?
Just saying. You probably need to go to law school. Might want to read K. F. Boackle's book on real estate.
Here's the question I asked, above, at 2:39. It remains unanswered other than speculatively. And some of you got pretty far afield.
"How can a notary be guilty of anything other than certifying that he/she witnessed a signature and viewed the ID proof of the person signing when he/she did not? A notary isn't responsible for the validity, accuracy or legality of documents upon which notarized signatures appear. What am I missing here?"
As long as we're speculating, I'll agree that since the corporation owning the store where the notary worked, paid up, the notary must have either notarized the signature of an absent signatory or must not have verified identification.
Why would an employee of a law firm take a document to a UPS store for notarizing? If I own a car dealership, would I take a new car down to Joe's Wax Shack to get a scratch buffed out?
@7:58
Can you please direct me to your source that an employee of a law firm took a document to UPS for notarization.
I read the article and do not see that referenced.
Do you have personal knowledge of this or did you just make it up?
For all of the “go to law school” crowd...please don’t. Do something more productive like women’s studies or Medieval English literature. This state can’t take anymore underemployed lawyers trying to make a living by roaming the countryside searching for the “big lick”. Also, I’m not a lawyer and I don’t regularly read real estate books, but a deed is not a very complicated instrument to understand. Second, UPS is absolutely stupid. Let’s work out a deal to prevent any further liability with the guy who got us in this situation. Oh, and for all the tort reform got us here ignoramous’s floating around...no economic activity in this state is what got us here. In other states, where there is actual economic activity you don’t have people searching for jackpot justice, beef plants, lignite coal plants, greentech, kior and the like.
Perhaps this point has been made earlier - apologies if so:
Alexander-Seawright was promoting this investment, providing the investors a deed purporting to give them a legal interest in the timber properties and telling the investors NOT to file the deed unless there was a default. Jon Seawright is an attorney (Alexander is not, so maybe he gets a pass). As an attorney, Seawright should have known that there was something suspect about this investment based on the non-filing of the deed stipulation. I mean, what kind of sense does that make? That seems to be prima facie evidence that he knew it was a scam.
Meant to say “Your stole money is getting away”. Now I got to say “Oh, Baker Boyz, not the notaries, er...livestock”!
8:35 - I am 7:58. If I'm mistaken, I apologize. I thought I read that either Alexander or Seawright or both had gotten notary action at a UPS store. So that I don't have to go back and read articles and posts, can you briefly clarify who, exactly, took documents to the UPS store to be notarized? Thanks.
A deed must be "delivered" from the grantor to the grantee in order to be valid. The act of "recording" a deed raises the presumption of delivery. That is the relationship between the validity of a deed and the recording of that deed. (Yes, I went to law school, and my education did not end at graduation.)
March 22, 2019 at 7:58 AM asked again:
"How can a notary be guilty of anything other than certifying that he/she witnessed a signature and viewed the ID proof of the person signing when he/she did not? A notary isn't responsible for the validity, accuracy or legality of documents upon which notarized signatures appear. What am I missing here?"
I tried to give a thoughtful answer, but speculation is all that is currently available. Speculation from others about Baker and notaries is plain nonsense at this point: there is no connection alleged by anyone between Baker, Alexander and Seawright and any notary or anything being notarized. The notarization issue was between Adams and UPS.
Here's the situation from what is currently described in the filings and from published information:
Adams, without any (known) involvement from Alexander, Seawright, Baker or anyone there, Butler or anyone there, or anyone else, took deeds with forged grantor/seller signatures to a UPS store(s) to have them notarized. For whatever reason - unknown from what I've seen - one or more notaries at the UPS store(s) notarized those deeds. With those forged deeds in hand, Adams then got people, including Alexander and Seawright via their own LLC, to invest.
As to the notarization, Baker people had no role and really, no opportunity, because the deeds were notarized by the time they became involved with each particular alleged deed.
The current allegations against Alexander, Seawright and Baker have nothing to do with notarizing deeds. The current allegations are, basically, that Alexander and Seawright are grossly negligent morons and the allegations against Baker are, generally, that it not only allowed grossly negligent morons to openly run their sideshow from its offices but it also failed to supervise their activities appropriately, including activities with clients of the firm to which the firm owed some duty.
The only reason the notarization came up at this point is that Alexander and Seawright made a claim against UPS alleging its notary/employee notarized forged deeds for Adams and that notarization caused them to detrimentally rely upon the deeds as valid. For whatever reason (again, unknown at this point) UPS thought it better to pay them $100K for a release rather than fight the claim. There could be numerous reasons for that, so again, speculation is all that can be done at this point.
The receiver's position is that Alexander and Seawright improperly asserted, settled and released a claim against UPS and in so doing, stepped on and over the receiver's claim while also violating the court-ordered stay on claims other than from the receiver. The court agreed with the receiver, hence the grant of the motion for contempt.
I'd speculate that the court would prefer to see Alexander, Seawright, their attorney and UPS return themselves to the pre-settlement status by returning the money and the release to the originators (and offering the receiver something to the receiver to cover legal fees wouldn't be a bad idea). Again, see the last sentence of the contempt order. If they fail to do so, I'd speculate that the court will order them to do it and if the court is forced to order it, it will also punish them for failing to straighten it out amongst themselves.
Messr. Lamar Adams.
A law firm’s duties to its clients arise from the attorney-client relationship. If a lawyer in a firm and client of that client elect to engage in activities unrelated to the attorney-client relationship and the practice of law, the firm has no duty to monitor or attempt to control those activities. Sorry to disappoint all of you BD and BS haters, but that is settled law.
Pappy O’Daniel
You did not go to law school.
Since you don’t practice law I suspect you have zero knowledge of what lawyers actually do.
99.99% of them do not await tobacco cases.
Please do the world a favor and find something, anything that makes you happy.
You fixation on lawyers and lawyers bank accounts is disturbing.
Life is short and jealousy is a lousy way to live life.
From a doctor who is also a lawyer.
10:41 AM wrote
"A law firm’s duties to its clients arise from the attorney-client relationship. If a lawyer in a firm and client of that client elect to engage in activities unrelated to the attorney-client relationship and the practice of law, the firm has no duty to monitor or attempt to control those activities. Sorry to disappoint all of you BD and BS haters, but that is settled law."
Not so fast.
Yes, that would be true if a divorce lawyer and a client decided to open a retail store together and the attorney did something that negatively impacted the store, be it ordering unsellable goods to flat-out stealing from the till. The client/store partner couldn't claim "malpractice" because, as you point out, the store has nothing to do with the attorney-client relationship or the practice of law.
On the other hand, this situation is different and more complicated, involving other facets of law and equity. Baker and Butler are not merely "law firms," they have investment, lobbying, consulting, trust, etc. people and departments, plus, I haven't seen anything about the clients or what the representation entailed. If the Alexander-Seawright venture had been in a completely different location and clearly separated from anything related to Baker or the firm's array of services, that would at least mitigate, if not foreclose, any liability as to Baker. However, the allegations are that Alexander and Seawright ran their "investment service" out of the Baker offices, used Baker staff, etc. Moreover, Baker hired non-attorney Alexander and put him forth as being an expert on investments, etc. (and if I remember correctly, even licensed) so it is at least arguable that an average, reasonable layperson client of the firm, even if they weren't a direct investments/advisee client of the firm, believed that Alexander's and Seawright's "investment opportunities" were connected to or at least sanctioned by the firm. Assuming the allegations are basically true, Baker had both the opportunity and the duty to not stand idly by and hope for the best. Also, and depending on the precise nature of the client relationship(s) with the firm, an argument might be reasonably made that Seawright was furthering the firm's legal practice by helping clients of the firm with other business even if it were only tangentially related to the firm's or the client's attorney-client relationship. The firm clients weren't buying 2x4s at the Alexander-Seawright House of Lumber, they were making timber "investments" touted by a Baker employee and a Baker partner working out of Baker's offices, even if Baker as a firm had no direct role in those "investment."
Now, do I think all 800 or so members of the firm in 20-plus offices knew Alexander (or Adams) even existed, much less that he and Seawright were touting "investments" with Adams and/or that Adams was running a scheme? Of course not. I know there are decent, honorable attorneys at Baker who were blindsided and horrified by the turn of events. Accusing Baker as a firm of being knowingly complicit in Adams' scheme, especially at this point, is undeserved. But alleging that Baker made mistakes and should have to participate financially for those mistakes is, in my opinion, reasonable under the circumstances as they currently appear. As to Butler, the allegations against them are a another topic.
To 10:41, there is some published case law about implied agency, apparent authority of an implied agent, and vicarious liability for the actions of an implied agent acting under apparent authority. Please check it out, apply it to the facts outlined above by 7:26 p.m., and report your findings.
@11:09, identify it genius.
This is 11:09. The following case is a good start:
Bailey v. Worton, 752 So. 2d 470 (Miss. Ct. App. 1999)
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