It's now the Baker Boyz turn to go down the road once traveled by Lamar Adams. Federal grand juries indicted former Baker Donelson attorney Jon Seawright and lobbyist Brent Alexander for securities fraud in the Lamar Adams case. The grand jury indicted Seawright for bankruptcy fraud as well.
Securities Fraud Indictments
A federal grand jury indicted Alexander and Seawright on February 25, 2020 for securities fraud, fraud, and conspiracy to commit mail fraud. The two men owned Alexander Seawright, LLC and Alexander Seawright Timber Fund (ASFT I). The two men were promoters for Lamar Adams in his phony timber investment Ponzi scheme.
The indictment charges the Baker Boyz "solicited over $20 million from more than 50 investors." They allegedly told investors their timber fund loaned money to a broker to buy timber rights from landowners and sold the lumber at a higher priced. They guaranteed a return of at least 10% even though they had no actual timber rights or contracts with timber mills.
The case almost mirrors the Lamar Adams swindle. The scheme took place from 2011 to 2018.
Several transactions took place in furtherance of the fraud:
January 10, 2018: $590,000 transferred to First Commercial bank for ASFT I
January 16, 2018: $17,700 to First National Bank of Clarksdale for Alexander Seawright, LLC
February 15, 2018: $825,000 to First Commercial Bank for ASTF I
February 15, 2018: $24,600 to Southern Bancorp for Alexander Seawright
The Justice Department seeks the forfeiture of all assets gained through the fraudulent scheme. The two men face maximum penalties of 25 years in prison and $250,000 fines.
Alexander Seawright Petroenergy Transportation , LLC
The indictment charges Seawright with using bankruptcy to perpetuate a fraud. He allegedly obtained insurance by stating on an application on January 18, 2019 that his company did not face any pending bankruptcy proceedings. However, the defendant had allegedly filed a bankruptcy petition just a few hours earlier. The grand jury returned the indictment on January 26, 2021. It was unsealed today.
Ironically, Baker Donelson bragged about Alexander's investment expertise on its website:
A rapidly growing area of Mr. Alexander's practice is advising venture capital and related investors on public policy issues. He has passed the Series 65 Registered Investment Advisor Exam, an examination required by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD) and the North American Securities Administrators Association (NASAA) for individuals who serve as principals in, or advisors to, hedge funds that invest in stocks, bonds and other financial instruments. He has also passed the Series 3 National Commodity Futures Exam, an examination required by the Commodities Futures Trading Commission (CFTC), the National Futures Association (NFA) and the SEC for individuals who serve as principals in, or advisors to hedge funds which trade futures and options.
The two men appeared on the firm's website until recently.
The two men no longer appear on the firm website. The cases are assigned to U.S. District Judge Carlton Reeves.
JJ first reported on the possibility of problems for the Baker Boyz on May 4, 2018:
The names of a lawyer and lobbyist at powerhouse law firm Baker Donelson have popped up as possible promoters in the Lamar Adams Ponzi scheme.
Several individuals told JJ that Brent Alexander and Jon Seawright tried to get them to invest in Lamar Adams's Ponzi scheme. The Justice Department charged Adams with bank and wire fraud as it accused him of operating a Ponzi scheme that was over $100 million. Alexander is a lobbyist and member of Baker Donelson's Public Policy Group. Seawright is an attorney and partner at the firm...
Alexander Seawright Petroenergy, Alexander Seawright Oklahoma Oil Services Fund, and Alexander Seawright Timber Fund I states their address is 4268 I-55N in Jackson - the same address as Baker Donelson when the companies were formed. Seawright used Baker Donelson stationary to submit the corporate registration to the Secretary of State. The registration for the other companies state their address is the same as the home address of either Alexander or Seawright.
The question to be answered is whether Seawright and Alexander the two recruiters named in the information.It appears the question was answered.
54 comments:
Go girl!
I hope they roast those two pompous bastards.
Alexander reminds me of a guy that sold me a used Studebaker.
Night night. Keep your bootyholes tight!
Baker Donelson will soon be changing their name to Dewey, Cheatham, and Howe.
Dangggggggggggggggggg!
What in the hell does go girl mean? These are federal indictments pursued by the very male U.S. Attorney, not by the Madison Timber receiver.
I’m not a lawyer, but isn’t the US’s conviction rate in these type of cases basically 100%?
That sound you hear is BakerDonelson getting its checkbook out to pay the receiver whatever she wants.
I bet Baker Donelson will be writing the receiver soon and asking whether it can
get the same deal Butler Snow got. A 9.5 million dollar payout would be a bargain for Baker now.
Let’s start the letter. Dear receiver: we love you and have always admired your work...
(“This is fine” dog in fire). I can’t copy the meme.
2:01- the success rate is high. But the only criminal trial held regarding this matter resulted in acquittal.
The new indictment didn't include Alexander. This doesn't look good for Seawright.
@1:56 PM - Try a little critical thinking. Her work product was shared with the criminal side which led to the indictments.
“... We are very sorry for filing that motion to dismiss against you and for objecting to the distribution of the Butler snow money to the victims.
We are not full of ourselves and we love the victims as much as we love you and your legal team.”
Brent and Jon be goin doooownnn!!! These two arrogant asses will have a fun time in the slamma...
It's been a while coming. This whole matter is so interesting. I hope the US attorney's office is geared up. I wonder if Baker Donelson will hire attorneys for its falling compatriots.
I don't know Mr. Alexander, so I will not comment on something or somebody I know nothing of.
As for Jon Seawright, occasionally someone gets in trouble and I am shocked. As in "I never saw that coming" or "I had no idea that person would do such a thing" or "you just never know about people." This is NOT one of those times. It doesn't shock me at all that Jon Seawright would be mixed up in something like this. Much like Marshall Wolfe, con-artists love to con people. They don't know any other way to do business. Doing business in an ethical manner just doesn't have the appeal to them. Baker Donelson had to know that Seawright played "loose with the rules" on many things. They just looked the other way when it was making them money I guess. Sometimes, you can tell the intergrity of the business and the business partners, based upon the integrity of the people they employee. Remember that.
Why would someone try to take out insurance knowing that they had a pending or soon to be pending bankruptcy. There has to be something I am missing.
Why do you say that about Seawright?
@2:30, try a little of any kind of thinking. An FBI investigation led to the indictments. Grand juries do not return criminal indictments based on civil investigations.
Seawright allegedly obtained insurance by stating on an application on January 18, 2019 that his company did not face any pending bankruptcy proceedings. However, the defendant had allegedly filed a bankruptcy petition just a few hours earlier. How Stupid are they?
@3:30 PM - whatever you say, bright spark.
Lots of people leaving jobs going to places mentioned for new employment. Must be a mole somewhere!
I imagine Bakers executive committee is happy the firm didn’t get indicted.
Their ALAS insurance has likely been revoked.
These scoundrels will cost BD millions in expenses coverages going forward.
And the receiver will soak Bakers insurer for upwards of 50 mm…..watch.
I know Lamar Adams is glad to see this. During the Bill Mchenry trial, he was brought back to the Madison County jail for the duration of the trial. Maybe this will be an opportunity for some of his ex friends and family to visit him.
Interesting, but Seawright is no longer on the BD webpage.
3:15
M. Wolfe!
Have nt heard that name in awhile!
Please, someone who has followed this more closely, can you explain the prior indictments versus the new ones?
RMQ
If only they had been paid a livable wage...
E & O insurance can do amazing things, but it probably can't buff this type of chit out!
5:28- the second indictment is additional to the first and just pertains to seawright's indictment for bankruptcy fraud.
Interesting that it is the crack lawyer J Darrel Seawright, Esquire extraordinaire, expert in “closely held companies” who is dumb enough to commit insurance fraud via email a few hours after filing bankruptcy. Probably should have paid attention in logic class.
Oh, please, 5:28...nobody has time to indulge your needs. You might as well have posted, "I got here late...what's this all about?"
@7:07 PM, yes Jon Seawright did something wrong and will likely pay a price, but don’t underestimate him. I went to NY Law with him and I assure you he is very intelligent and an extremely capable lawyer. He will not go down without a strong fight and when the dust settles he will not be in as precarious a situation as everyone on this blog seems to think. Stay tuned...
E&O insurance only pays for errors and omissions not intentional acts. A decent insurance company will not protect Baker from this as the fraud was intentional.
He wouldn't be at BD this long if he was an idiot. The indictment is just that, an indictment.
His side will be presented here. At some point I'm sure he will file a motion to dismiss that presents his arguments. It will be posted here when submitted.
KF, thank you for being fair. Our community owes you a great deal of gratitude for being the only real journalist vs the corporate talking heads that don’t even bother with the basics. You are literally the only true investigative journalist we have and while I get frustrated with you sometimes, I respect what you do and the service you provide. This next beer is for you, cheers.
What policy of insurance indemnifies for criminal acts? You guys are buffoons.
@ 9:16. Haha....what a damn joke. Who are you, Kingfish’s mother or Seawright’s wife? Surely you can’t be f’in serious.
What policy of insurance covers negligence?
Negligence of boards to properly supervise work?
What about that negligent conduct is criminal?
@7:41
Pride goes before destruction, a haughty spirit before a fall
I wonder if anyone on the prosecution team or the receiver has noticed the bit on what appears to be the card or advertising piece from Alexander Seawright about "accredited investors and qualified individuals only." While "qualified individual" might be an undefined term, "qualified investor" is a specifically defined term in the regs.
For those unfamiliar, an accredited investor (an individual) is defined by securities regs but the requirement to verify/satisfy and recordkeep is placed upon the entity offering the investment. There are literally millions of people who qualify - see a general description below or Google "Reg D" - but there must be something such as tax returns, financial statements, etc. between the offerer and investor to verify it. Broadly, it allows offerers to avoid certain reg requirements but it places upon them some duty to verify status. For the investor, it allows access to higher-risk, higher return potential deals but limits the claims they can pursue if things so wrong.
Anyway, if Alexander Seawright did no verification at all as to the qualifications, that is a big no-no. The offerer of the investment can't simply say, "Well we assumed..." or even, "Well they said..." In other words, even if Warren Buffett walks in and says, "I see you boys deal with accredited investors and I am one..." the offerer is obligated to have more than a verbal claim from the investor (assuming there have been no past dealings). Also, if they did no verification of any kind and the person did not actually meet any requirement, they can demand a refund of their investment. There are a lot of potentially interesting twists and turns possible with this but having dealt with it, it caught my eye.
Where it gets interesting is that it seems odd that any legit, honest offerer would skirt this in any way. Not because of the verification requirements but because such (legit) offerings simply not being something for those who do not easily meet the requirements. In other words, the legit, honest offerer of complicated and sophisticated high-risk, big-dollar deals doesn't want to be involved with unsophisticated retirees risking their nest eggs for a myriad of minute fractional interests, for the sake of everyone. That's just a recipe for heartaches, headaches, and problems all around. If Ma and Pa Kettle showed up at BD Jackson with a freshly unearthed Prince Albert can of 100s for an appointment with the nice young men buying trees for them, that should have set off alarms Helen Keller could have heard even well north of Memphis.
For those who do not know about such things, while there is no formal certification or other process to be an accredited investor, the definition is spelled out in Reg D. An individual must be a demonstrably sophisticated investor, a licensed individual, have an sustained income of over $200K year (or $300K if it is a married or equivalent couple), a net worth of over $1 million excluding the primary residence and mortgage if the value of the residence exceeds the mortgage, etc. A retired widow whose assets were $999,999.99 in cash/securities and a $500K home with no mortgage wouldn't qualify. There have been changes in the last 10 years but that is the gist of it.
If McHenry skated, so will Seawright. But surely, 7:41, he won't be his own lawyer.
@7:41PM, serious question as only interested in truth (don’t know Seawight, didn’t lose any $$$ via timber ponzi, etc.).
Do you mean “he is very intelligent and an extremely capable lawyer” that knew what he was doing was immoral/criminal but may/will be “intelligent” and “capable” enough to get away with committing the crime without suffering just consequences?
10:55 there is a difference between negligence and intentional acts. What "board" do they sit on? This isn't D&O we are talking about.
8:48 pm
You’ve never been a partner in a 500 man law firm.
Stop trying to opine about things you don’t know
Seawrong was an equity partner and on executive committee (think BOD) of the law firm.
They have an entire group to staff / watch activities of partners and sign documents affirming certain supervisory controls are in place….they are required to attend meetings and sign in to affirm understanding of certain norms in order to keep insurance and reinsurance
Greed can make usually smart people to do foolish things. When someone offers an investment opportunity that is represented to bring returns far above the market to small individual investors instead of sophisticated large investors, there is usually something fishy. When promised large returns are in an industry that is not known to be netting large returns, there is something fishy. If it sounds too good to be true, it usually is. But greed can make normally fairly rational people do foolish things. If Seawright is as smart as one would expect, why would he be innocently pushing investments which anyone with the smallest level of sophistication should have recognized as highly suspect? I won’t hazard a prediction as to outcome of the criminal case, but I can say that he was intentionally leading people into bad deals or he was extremely foolish. The timber deals had all the hallmarks of a classic Ponzi scheme that gets repeated every few years. This wasn’t even the first timber Ponzi scheme. A very similar one was run in the 1980s in North Louisiana that collapsed when one of the banks got suspicious of check kiting and pulled the plug by declining to pay checks on uncollected funds. The scheme in this case was perhaps more sophisticated, but should have been recognized early on. But people investing closed their eyes to the fairly obvious signs because it sounded so good. And Seawright took them along for the ride, deliberately or foolishly.
@4:22
I doubt any partner in a 500 man firm would use the word “opine” in a sentence. Maybe a second year law student intern. That’s the lawyers last resort after using held, ruled, stated, said, found etc
@ 4:22 Since you seem convinced there could be coverage for negligent supervision of a criminal act or fraud, please tell me what ISO form to review. I'm legitimately interested in this type of policy.
For those looking for insurance for their fraud schemes and other criminal activity, Soprano and Associates of Bayonne NJ will sell you just such a policy. You can contact their capo, er, VP of sales Paulie Walnuts on his burner phone, 1-800-BADABING, or the phone out in front of the Bergin Hunt and Fish Club, 1-212-STUGOTS. Be aware that while they will sell you a policy (and take a bet or loan you some money) and collect the premiums, they are not AM Best rated and have a disappointing record paying claims. They do have a really cool company motto, "Leave the gun, take the cannoli," and logo, a dead fish wrapped in a bulletproof vest.
The claim against BD is negligence, not fraud. The complaint was posted here.
Allow me to opine: So much bloviating bullshit posted here. Goot Gott you law dogs fancy yourselves entertaining. Some of you are the guy at social gatherings who insists on getting right up in your face, reeking of cigar smoke and gin, and insisting we listen to your self-adulating blather. No wonder your profession ranks right above that of 'Used Studebaker Salesperson'.
I've reviewed the materials, looking for the basis for concluding Seawright and Alexander knew the scheme was fraudulent, but can't find it. Is it just that they said they'd review everything diligently but didn't? If so, that's pretty thin.
Are’s lawyers, banks, and sellers ethically, legally and morally obligated to verify where land and or Timber is located? Also aren’t all these persons required to verify deposits or lack there of from cuttings? Heck to buy a home every detail of your life & finances are examined! This is insane on every level. There is no way a one man show can be responsible for this. Lamar is and cannot be the only one to go to prison please no way no how!
Post a Comment