One of the Baker Boyz is going broke after he filed a Chapter 7 bankruptcy petition Friday. Baker Donelson partner Jon Seawright submitted a notice to U.S. District Judge Carlton Reeves to stop all proceedings against him in the SEC's efforts to recover commissions paid in a phony timber investment scheme.
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 in recovering assets for later distribution to the victims. Her efforts include suing promoters who received commissions as well as the Butler Snow and Baker Donelson law firms. Adams is incarcerated in federal prison after he pleaded guilty to one count of wire fraud.
Jon Seawright is a lawyer at Baker Donelson while Brent Alexander is a lobbyist at the firm. Seawright and Alexander created a timber investment fund, Alexander Seawright Timber Fund I, in 2011 that would invest in Madison Timber. Ms. Mills' complaint alleges they pitched the phony investments to Baker Donelson clients:
Throughout this time period Alexander and Seawright pitched their fund to potential investors, including Baker Donelson clients, as an exclusive “friends and family” fund. Alexander often used the phrase “simple, elegant and profitable” to describe the fund. He told investors that “we are in it”— a lie; neither Alexander nor Seawright invested their own money in the fund—“our neighbors, lots of physicians, many of the attorneys at Baker Donelson and other firms, a United States Senator etc.”
78. Alexander and Seawright specifically targeted individuals who had recently sold assets because they knew those individuals had money to invest. Such individuals included clients for whom Baker Donelson had recently closed transactions.
Ms. Mills claimed the Baker Boyz did little work in exchange for the commissions. Each contract for sale of shares contained a promise that Seawright or Alexander would personally inspect the land that was the subject of the timber deed. No such inspections were performed. They couldn't inspect the properties because they didn't exist. However, they were more than happy to get paid:
89. Between 2011 and April 2018, Alexander and Seawright withdrew over $980,000 from the Alexander Seawright Timber Fund I, representing their “shares” of investors’ returns. In addition Adams separately paid them over $600,000 representing undisclosed “birddog fees.”
90. On information and belief, Adams also sometimes paid Alexander and Seawright bonuses, including Christmas bonuses in cash that he had delivered to Alexander and Seawright at their Baker Donelson office.
Alexander and Seawright thus allegedly acted as unlicensed brokers, a violation of state and federal law. The Receiver sued the Baker Boyz for conspiracy, negligence, aiding and abetting, violation of Mississippi Fradulent Transfer Act, Mississippi RICO Act, and joint venture liability. She also sought to hold Baker Donelson liable for the damages caused by Seawright and Alexander.
Mr. Seawright filed a petition for Chapter 7 bankruptcy Friday. He submitted a notice to Judge Reeves yesterday and asked for an automatic stay of the proceedings. Mr. Alexander has not filed a bankruptcy petition.
The petition states that he has assets between $1 million and $10 million while having debts between $100 million and $500 million. He lists a home worth $575,000 but states a lender holds a mortgage on it for $470,000. The petition and schedules are posted below.
Kingfish note: Sooo...... does this mean just the receiver's lawsuit against Seawright is removed to bankruptcy court or is the entire shebang, Lord Snow Baker Donelson et al removed to bk court as well?
39 comments:
The stay will only apply to the claims against him. He should effectively be severed out and everything else will proceed.
The entire case will be stayed and the receiver will move the court to sever all claims against JS. However, fraud is not dischargeable in Bankruptcy so any of those claims will be sent back or I guess the Bankruptcy judge could hear those claims.....bet most of it goes back to Reeves though in short order.
When are the Feds going to come in and file charges against all of these recruiters and sub-recruiters? Not all cases are going to be plea deals guys. Some cases you are going to have to prove! Ms. Mill's complaints contains a pretty good argument for charges to be filed against at least some of these perpetrators.
This is the smart play-
He must have spent two years renovating that house on Crane Ridge and it's as plain as it was before the renovations.
So where did the million$ go? Up his nose? Asking for a friend.
Who the hell would loan this guy money if he is worth between 1 and 10 million and has debts of 100 to 500 million? Sounds like BS to me.
So for the non educated blue collar folks this means?......
Go to Section 4 of the bankruptcy schedule. Looks like Seawright and Alexander separately went into some kind of trucking business which went belly up back in January. Seawright personally guaranteed payment on the truck leases and was sued for $2.5 million. They filed Chapter 11 on the trucking company in January but Seawright waited to file for personal bankruptcy until the insurance company sued him for the balance due in August.
Hard to imagine why these two silk-stocking types ever dreamed they could make money in the trucking business -- unless they thought they had some kind of angle that didn't work out.
Also -- holy crap Seawright owes money to a bunch of expensive lawyers! WTF is up with that???
Voted Hood, but the rest were cast for republicans. Be interesting to see how many do the same. Tate is, well...Tate.
1:32PM asked, "So for the non educated blue collar folks this means?"
Unless you "invested" in this clusterfook with Seawright, etc., it doesn't REALLY mean anything at all.
If you are looking for an explanation of what it means to Mills' recovery, as others have pointed out, it probably won't mean a whole lot at the end of the day. If Seawright is accurately portraying his financials (see below), he doesn't have much (relatively speaking) in assets to satisfy a judgement of the scale she is seeking, even if Mills could take literally everything he owns, right down to his $250 car, shotgun and wedding ring. But she can't do that. The only real asset he claims is his 401k and that is protected from creditors in a bankruptcy.
If you are looking for commentary from folks who might have a better perspective, I skimmed the filing and it seems, er, interesting. I have no personal knowledge about his financials, so perhaps these are an accurate portrait of them. For a 40-something couple, one a partner at Baker, making over $350,000 in earned income in the Jackson area and having a mortgage on a single home on the lowish side of perfectly reasonable for that income, they seem a bit off on a casual skimming. As such, it would not surprise me to see some debate over the accuracy of them or at least naked accusations of asset-hiding. Again, I don't know him, his wife or their finances. They better be accurate or he could and likely will find himself in very real and serious trouble.
Just an observation, but if the only "investing" he was directly involved in, especially during the beginning of his peak earning years, was Adams' timber scam, i.e., no stocks, bonds, REITs or direct real estate investments, etc., not even some CDs or other cash accounts, that says a lot about his investment prowess. Had he acted prudently, he would be well on his way to being a legit multi-millionaire facing no tawdry accusations, huge claims, and the probable loss of his previous career path. If he once had a lot more in a variety of assets, now liquidated to maintain the services of the laundry list of attorneys he now lists as creditors, he may well be actually bankrupt. From the filing, he is down to a mostly empty closet in a heavily-mortgaged, mostly-empty home with a clunker in the garage and a mailbox full of overdue notices (albeit with a moderate, untouchable 401k). If reports of his role in the scam are just broadly accurate and this filing is an accurate reflection of his current assets and liabilities, he has no one to blame but himself for his reduction to such circumstances.
at 1:48
Maybe the trucking company was going to haul timber to the mill. Heard he had a good contact in the timber business.
@2:13 -Wrong Thread??
$0 in contributions to charity. Sad!
After reading through the filing it appears that he must have transferred a bunch of assets to family members. It only lists a 401(k) account but no retail brokerage accounts? There are no vehicles listed - except for the $250 4-wheeler that won't crank. The list of personal property includes very little jewelry. And what Mississippian only owns three guns - a shotgun, a pistol and a deer rifle? I understand he was already being sued on separate matters but he has clearly sought to protect his family and limit personal exposure. Also, how can he legitimately list the Receiver as a creditor for $165MM - and if he can why isn't every defendant seeking exactly the same protection in bankruptcy court?
What a sleazy legal maneuver by an obvious con artist. One must question the advice
and judgement of all of these affiliated dishonest characters. Everyone affected one way or another by legal action or advice from Mr SeaWright should question the soundness of his legal guidance/advice. Seems if he would screw valued firm clients over in this Ponzi scheme, that he likely screwed many other clients of Baker on a variety of other matters. Surely, he will be disbarred. Aren’t these actions fraudulent? Where’s the justice?
Alright you plebes! No more comments about voting for Hood will be allowed. Now lets get back to the point at hand...Locking McHenry's ass up.
Is there anything about which you losers will not speculate?
to 4:42...charitable contributions are some thing you put on a tax return, not a petition for bankruptcy
Well done 1:32
Folks with money can always find a way to hide money. For all the investors (who put up earned income and not family money or lawsuit money) on here, you will never get monetary justice. In believing in the almighty power of something bigger than all of us, I would have to believe St. Peter will take care and put all of us in our rightful place. For some... What goes around, comes around. Karma is a female dog.
"For all the investors (who put up earned income and not family money or lawsuit money) on here, you will never get monetary justice."
An interesting point. First, you are correct in that those who "invested" will not recover their losses. A lot of that money is long gone.
But that brings up another point. For all of the greed of Adams, Seawright, etc., what about the greed of those that expected to get something special on their "investment." It does not absolve Adams, Seawright, etc., of their scumbaggery, but it does temper sympathy for those who expected more than a reasonable return in a similar, but honest, investment warranted. The myriad of stock IPOs getting clobbered recently help to illustrate the point. Those who seek and expect exceptional returns often suffer exceptional losses.
@9:44, so where do you invest your money?
Where to invest money? Start with something less risky and possibly insured or just buy land. Over 20% internal rate of return sounds really great, but is not really logical. At some point common sense has to come into play. Kinda like thinking your going to get away with cheating on your significant other. You may think it is exciting at first and you'll never get caught. But the odds are always against you. Did Adams advertise that the investment was risk free? Doubt it. And, most investors were probably hesitant to ask because they may not have wanted the truth. No one ever thinks they will get scammed on that kind of scale.
I think he advertised that the investor would obtain a deed and said they could record the deed if they didn't get their investment back.
Any attorney who signed off on behalf of an investor should be scorched for lack of due diligence and not reading the description of the property and doing a little title work.
And, most of the investors are probably logical enough to know there were risks. Chance they took and simply didn't work. Think of all the folks who lost inheritance they put into Worldcom.
I hope they get their money back, but I have just lost faith in our justice system and no real plan from Mills as to who will get what. Other than, what her team earns from all this. Sometimes you just say thanks, but no thanks. Surely no one really put all their eggs in one basket.
"Those who seek and expect exceptional returns often suffer exceptional losses. November 5, 2019 at 9:44 PM"
So; The Christian philosopher at 9:44 actually believes in his heart that it's alright to gamble a little bit, but not a lot. And, according to his logic, if you are a bit too greedy, and cross his imaginary risk-line, and lose, you deserve what you got...or you deserve it, sort of.
He'd no doubt complain that I have two hooks on my crappie line while he only has one.
He forgot to tell us where he's a deacon.
Just got around to reading this bankruptcy filing. What a crock of shit. I guess we are to believe this guy didn’t have any electronics outside of a iPhone???? His listed investments are more than just on the low side. Isn’t he a partner in the firm? 360k is near pathetic if so. He is maxed out with credit cards. He has a whole cadre of lawyers but does not seem to know what he owes any of them. I can guarantee I know monthly what I owe my attorneys. My guess is he prepaid several of those firms. Does anyone not know what they owe in credit card debt, particularly those being handled by the bankruptcy division of the cc institutions? Why isn’t he disbarred? Isn’t it negligent for him to work on behalf of any Baker client? This is just a further scam. I do not know him or Alexander but all I hear around town is how great their wives are. If true, why are they continuing this crime? Let’s see all of their tax returns and financials from every year of this scheme. I bet that would expose where the money went or is hidden. I do know Thornton and he is massively OCD. He will know where every cent is or went. If he is so pure and perfect as he acts, why is he still hiding under the firm umbrella? He is always sure to tell you about others issues while implying he is lily white. Time for him to come clean and repent his sins. What a bunch of greedy good ole boys.
Baker Donelson is not a partnership.
10:49 - typical lawyer response - shareholder is often referred to as partner- just look up the firm and you will see an article titled “ how I made partner at Baker...”. Point is lawyers share in the profits unlike associates. They are certainly not in a partnership with their clients that screwed.
"So; The Christian philosopher at 9:44 actually believes in his heart that it's alright to gamble a little bit, but not a lot. And, according to his logic, if you are a bit too greedy, and cross his imaginary risk-line, and lose, you deserve what you got...or you deserve it, sort of.
He'd no doubt complain that I have two hooks on my crappie line while he only has one.
He forgot to tell us where he's a deacon."
9:44PM here, and I am not a Christian, not a deacon, have absolutely no problem with anyone gambling any amount they wish with their own money/assets, and wouldn't feel the slightest envy for someone who caught more fish than I. In other words, you were completely wrong in literally everything you said. My comment was broadly based on a Wall Street saying, "bulls make money, bears make money, pigs get slaughtered..."
As an aside, until I personally see evidence to persuade me otherwise, I was and am giving Seawright some benefit of the doubt, that he is just very careless, naive and/or unsophisticated, rather than a dishonest person with scienter. But his presumed innocence (civil or criminal) does not mean his greed didn't put him in the position he swears he is now in and it certainly does not excuse his greed.
I am perfect at everything I do. It is what I don't do that usually burns me. I didn't invest in this one and did not get scammed. Finally got something I didn't do, correct. I'm getting better. For those of you with a $100K to write a check for this stuff, more power to you. I'm sure you didn't give them all you had.
His wife did not file bankruptcy.
"...and I am not a Christian, not a deacon, have absolutely no problem with anyone gambling any amount they wish with their own money/assets, and wouldn't feel the slightest envy for someone who caught more fish than I."
Yet you launch off into a diatribe that defines, according to YOU, those who gamble a little and those who bet the ranch and the riding cultivator. You're simply judgmental. Own it.
12:26: Riddle me this: How can you be so judgmental yet not be a Christian? Only Christians judge others.
Not all shareholders share profits. @11:27 is speaking from ignorance.
12:44. It appears you might be a little sideways cause you’ve just learned that it doesn’t take a lawyer to figure out 99% of the shit lawyers take the credit for. In Mississippi, all you have to do to be an attorney is be willing to sit through the bullshit, take the bar, and last but not least, plain ole arrogant. Shareholder and partner could very easily mean the same thing. Or, there may be many aspects of the corporation which outline how a partner becomes a shareholder. Maybe you should pay a lawyer to Splain it to you. I guess you feel important since you called someone ignorant. If that’s all you’ve got, your a dumbass.
@3:02, I take it you are not a lawyer. How do you put your brilliance to work?
I agree with 5:02. Most Mississippians couldn't tell you how many guns they own and it would take half a day to conduct an inventory.
8:41 - Not ripping off clients or parsing terms like partner and shareholder.
Which firm are you with Baker or Butler? I’m sure you all busy paying for your clients’ legal work at other firms to make sure they get the best advice after preying upon them, right? Do you think mediation is best for them? Do you think Alexander and Thornton have the same exposure as the attorneys at your firms?
8:41, How did you guess? No brilliance here, just common sense and only a half a bubble off of plumb. If I was brilliant, I could probably find something more productive to do and would not care to be reading this website.
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