Thursday, May 30, 2019

SEC Sues UPS in Lamar Adams Case

SEC Receiver Allyson Mills sued the UPS Store in Madison and several UPS employees in U.S. District Court this week for notarizing phony deeds in the Lamar Adams timber fraud scheme. The defendants are Herring Ventures, LLC, Austin Elsen, Tammie Elsen, Courtney Herring, Diane Lofton, and Chandler Westover.




The SEC is trying to claw back illegal profits earned by Lamar Adams and  promoters of a $164 million Ponzi scheme based on phony timber investments.   Receiver Alysson Mills represents the SEC. She will recover assets, distribute them among the victims, and provide progress reports to the court.

The Receiver claims the defendants "enabled" Adams to further his Ponzi scheme by notarizing the fake timber deeds each investor received for the investment.  The timber deed claimed they gave Madison Timber the right to harvest timber on the subject land in each  deed.  The Receiver's claim against UPS rests upon this crucial argument:

27. The timber deeds appeared to have been signed by the landowner, as grantor, and Lamar Adams for Madison Timber, as grantee. Below the two signatures, a notary attested to the signatures’ authenticity and affixed his or her notarial seal. The following is representative ofDefendants’ attestations:


However, the landowners  never "personally appeared" before the notary.  The landowners/grantors often did not exist.  "In all instances, the grantor-landowners' signatures were forged by Adams," said Ms. Mills.   She said the grantor's signature was the most "important mark" on the document.  Without the signature, the right to harvest the timber on the subject property would have been unenforceable by the investor.   Adams used several means to forge signatures:


sometimes Adams forged the grantors-landowners’ signatures before he presented the timber deeds to Defendants, such that it appeared that he or she had already signed. Other times Adams presented the deeds with a blank where the grantor-landowner would sign, such that it appeared that he or she would sign later. At no time, however, did any grantor-landowner sign the documents in Defendants’ presence.

31. Over the course of the Madison Timber Ponzi scheme, Adams fabricated fake timber deeds for thousands of investments—501 in the last year of Madison Timber’s operations.

A notary is barred from notarizing a document when the signature is blank or the signing party is not present. UPS offers notary services to the public.  Ms. Mills accuses the UPS notaries of participating in the conspiracy to defraud investors by notarizing phony timber deeds and signatures.

Ms. Mills charged the defendants with civil conspiracy, aiding and abetting, and gross negligence.  She charged the UPS Store in Madison with one count of negligent supervision and retention.  The complaint argues  UPS Store, Inc is liable for all damages awarded against the Madison store and its employees.

Ms. Mills already recovered $100,000 from UPS.  The Baker Boyz, Jon Seawright and Brent Alexander, sued UPS for similar claims, claiming they were victims in the Ponzi scheme.  They earned substantial commissions selling the phony timber investments as promoters for Lamar Adams.  However, the Receiver was having none of it.  She sued them for the $100,000 UPS settlement.  They ceded the funds to Ms. Mills.  The $100,000 will be used to offset any further damages awarded against UPS.  


 Related Posts
Court approves contingency fee arrangement for receiver.  
SOLD! 
Receiver submits report.  
Court to approve sale of Lamar Adams home.  
SOLD! 
Baker Boyz purge contempt.  
Tim-berrr! Receiver sues Patridge & Mom, Accuses Bankplus of RICO 
Baker Boyz Found in Contempt 
Baker Donelson swings ax again at SEC lawsuit.  
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!!!




11 comments:

Anonymous said...

They must've been really selective about this policy. I tried to get something notarized there about 3 yeara ago. They declined because my Drivers License had expired. Of course I didn't offer a tip. I bet he slipped them a Benjamin each visit.

Anonymous said...

Where does motion to enforce arbitration stand?

Anonymous said...

Sheeeeeit......once they start pressing those hourly wage employees, they'll roll over but quick to avoid penalties.

Anonymous said...

Now we know why Alexander and Seawright got a $100K settlement without breaking a sweat - but - unless one or more of the employees is independently wealthy, they are not a source of much direct monetary recovery. Mills must think there is a much deeper insurance/bond pool to dive into and/or she wants info more than she wants whatever chump change the personal Defs might be able to scrape together before bankruptcy becomes their choice.

If they recorded each notarization in their log book, that might be an interesting read, but it also might provide some evidence of lack of scienter. On the other hand, if they were taking anything of value to knowingly commit fraud, that could provide UPS with cover. If someone else brought any fake deeds in for notarization, that too would be interesting. I find it curious that: 1) Adams did not just forge the notary info, and 2) that all of these folks would know this was a scam yet put their names on all these deeds AND nothing ever leaked out. Five UPS Store clerks in on a hundred-million-plus scam with Lamar Adams and none of them getting stupid or mouthy just doesn't add up. Note that the notary language does not say that the parties actually signed the instrument in the presence of the notary but rather that they appeared and "acknowledged that they signed..." it. While it doesn't excuse the negligence, I can see UPS Store personnel stupidly but innocently trusting Adams and ignoring the rules. After all, while part of his scam was fueled by the greed of "investors," part was fueled by his willingness and ability to con lots of people into doing stupid stuff. I'd be curious to know if a person claiming to be the grantor was actually present when the fake deeds began to flow.

Whatever the reason for this filing, I cannot imagine Mills thinks the employees will be a source of much money so it will be interesting to watch this one unfold.

Anonymous said...

Leonard Goodgame.....

Should’ve went with Chris P. Bacon!!!!

I can’t breathe!

Anonymous said...

UPS will have insurance in place to cover these type allegations.

This is simply good lawyering on the part of Mills.

And it’s why she was upset with Baker thieves who sued ups and potentially closed this avenue of collection.

Most people have no idea how much insurance actually covers and no idea what triggers that coverage.

For example, OJ was defended by his home owners policy for a period of time.

Anon-E-Mouse said...

I’m not a notary. But doesn’t a notary only certify that the person signing a document is the person signing the document and not the validity of the document itself?

Freaking lawyer needs to get beaten if this is what happened.

Anonymous said...

"UPS will have insurance in place to cover these type allegations."

Why?

UPS well might supply elevated surety coverage, but I'm not so sure UPS is liable to anyone in this situation. There is no allegation that the "investors" relied upon UPS or even these notaries in any way and in fact, there is no allegation that the "investors" even had any specific knowledge at all about UPS or the notaries. In other words, it is unlikely that Adams told "investors" that they could trust the deeds because UPS notaries notarized them AND the investors then relied upon UPS or its notaries' notarization in any way. Moreover, I doubt negligently or improperly notarizing forged deeds is in the job description or expected duties nor were they ever asked to do such by UPS so the argument will likely be made that the notaries were acting well outside the scope of their employment by notarizing these deeds.

Now, if the surety is "per incident" and has a large limit (and there are 5 notaries) that would be a source of money worth pursuing. My guess is that if UPS and/or its surety paid the Baker Boys $100K, there will be or already is an offer on the table in this one. I wouldn't be shocked to see at least an attempt to argue that a full or partial good-faith settlement and full or partial release was already in place.

This has the potential to lay out a lot more of Adams' scam for all to see.

Anonymous said...

UPS is the franchisor. It won’t be held liable for the acts of its franchisee and its employees.

Anonymous said...

"It won’t be held liable..."

If you are an attorney, please self-report. If you are a layperson, West (or Google) is slam-f'ing-full of judges, justices, juries, attorneys, magistrates, boards, et al, doing things they "can't," "won't," should not, and "would never" do. Related is the maxim, "Never ask for justice lest you get more than you can handle."

Anonymous said...

A notary is certifying the person signing gave them some method of identification to make them reasonably certain that that is the person identified.

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