Madison Timber Receiver Alysson Mills announced recently she obtained $17 million from several banks that will be distributed to victims of the Lamar Adams Ponzi scheme, bringing the clawbacks to a grand total of $41 million - less than a quarter on the dollar. However, there is one group that has escaped her wrath so far: investors who cashed out of the Ponzi 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. Adams is incarcerated in federal prison after he pleaded guilty to one count of wire fraud. 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. Butler Snow settled for $9.5 million. Mills and Baker Donelson are still slugging it out in federal court. However, Ms. Mills went after several banks as well.
The Receiver sued Trustmark, Bankplus, River Hills Bank, and their employees in federal court, alleging they made it easier for Lamar Adams to carry out his Ponzi scheme as their customer even though Trustmark and Bankplus submitted suspicious activity reports about Adams to the federal government.
Undoubtedly pleased with herself, Ms. Mills announced the bank settlements in her 90-day status report on September 30. She stated in the status report she also collected $21,631,082 from other sources such as Butler Snow, the Adams family, and various LLC's. The total collected will be $40,831,082. A nice sum of money but only unfortunately 25% of what was stolen through fraud.
While Ms. Mills brags about her 25% recovery, the Receiver in the Bernie Madoff case recovered over 75%.
You read that correctly, over 75%. The Wall Street Journal reported in 2018:
Of the $17.5 billion or so of stolen money for which claims have been filed, they have recovered $13,305,106,370.07. (Try saying that aloud.) That’s a little over 75 cents on the dollar, which is remarkable, considering that when they started Mr. Picard expected to recover “5 to 10 cents on the dollar,” which is “typical in a Ponzi-scheme case.”...
“Picower’s estate effectively paid back everything he took out in profits from Madoff. Now in a normal case, where a Ponzi scheme is in existence for 18 months or two years, an investor probably wouldn’t have a lot of money. Picower, like a lot of investors, was a wise man. He took his ill-gotten gains and used those to invest in the real market. He knew better.” So his estate was able to “cash in oodles of his Apple stock” and settle. Mr. Sheehan says there are “many, many defendants that are like that, that have the cash and can pay us. And a lot of them don’t want to be smeared with the Madoff case, so they settled.” (KF note: Lamar Adams operated his Ponzi scheme from 2011 to 2018.)
Mr. Picard won a key legal victory in August 2011, when the Second Circuit upheld the method he and his team devised to determine how to handle claims. Madoff investors who took out more money from the fund than they deposited would have no claim, and would instead be liable to return their Ponzi-inflated gains. Only net losers would receive payments from money recovered by the trustee. As a result, there have been some “good-faith defendants,” as Mr. Sheehan calls them. “It’s sort of a misnomer. We call them that because we don’t have to prove they knew anything about the Ponzi scheme to get their money back. What they got was fictitious profit.”... Rest of article.
Captain Picard's team went after the profits gained by the profits. If the phony profits were invested and earned more profits, those profits were fair game. What does that have to do with the Madison Timber case?
What is missing from the long list of SEC defendants? Madison Timber receivers who received their profits. Read through the status report posted below. Read through the status report posted below. Look at the list of defendants: banks, Adams business partners, promoters, law firms, UPS, Pinnacle Trust, and employees of said defendants. Notice anyone missing? Investors who cashed in and cashed out of the Ponzi scheme.
Baker Donelson might be asking this very question. The law firm is slugging it out with Ms. Mills over subjecting Madison Timber victims to discovery of their finances and dealings with Madison Timber. Ms. Mills is vigorously fighting these efforts, reporting "I will continue to object to invasive discovery into victims’ personal lives and finances."
Baker Donelson could be simply using discovery as a stall tactic or to harass the victims. However, there might be another possibility. Could Baker Donelson be trying to find out who made what out of the Ponzi scheme? It is a question worth considering.
Perhaps there are no investors who profited off the fraud. Maybe they all plowed their money back into the scheme and became victims. If so, then Ms. Mills should say so in her report and not leave it up to speculation. However, it is hard to believe Adams carried out a $164 million Ponzi scheme for seven years without any investors making money off of his fraud. Keep in mind Ms. Mills is paid on contingency instead of billing the estate for time worked.
If any investors cashed out, Ms. Mills should take them out and that, my friends, is the bottom line.
17 comments:
There are absolutely investors who profited. Why she will not go after them remains unclear.
She won't do it because due to her communications with them, they have become "friends"
@10:57 - since Ms. Mills is compensated based on contingency, rather than hours billed as KF stated, she is forced to make decisions about which avenues of recovery to pursue. Once you knock out the "big ones" like she has done in the announced recoveries so far, every incremental dollar of recovery will get more difficult as you are beginning to attempt recovery from a relatively large number of individuals with presumably on average less resources to go after than the big banks / law firms / heavily involved individuals.
While the recovery % in the Madoff case is impressive, keep in mind that the trustee began the process in 2009 and it is still ongoing to this day. Ms. Mills has been working less than 5 years.
Give it time, @10:57... give it time...
Part of the Dicky Scruggs' scandal were allegations from several lawyers who were on the legal team led by Scruggs that won a large settlement in an asbestos case. They claimed Scruggs short-changed them in the settlement and used that ill-gotten money to fund the legal team that won the tobacco settlement. Scruggs settled all those claims at the same time he pleaded guilty in the judge bribery case. Those asbestos lawyers were paid their just due from the asbestos case plus a part of Scruggs tobacco settlement that was partly financed by their short-changed asbestos money.
If I was a late in the game investor who lost big bucks and never garnered a profit, I would be RAISING HELL for Mills to go after those who profited, of which there were many.
Quite a number of investors were in this for YEARS and profited big time by cashing out before the pyramid crumbled.
Why should these profiteers be allowed to keep ill gotten gains at the expense of others?
They should be thrilled just to have their principal investment returned.
To 2:08
Good base. The game has to be declared"NO GAME". Immediately (as is).
If you were a profiteer who invested money, you would be RAISING HELL that someone wanted to stake claim to your profits. Some even paid taxes on those profits. This ball rolls down both sides of the street.
It would be interesting to know who the net winners were and whether that could be a factor. But typically a lawyer on a contingency contract is driven by the economics of the case. Mills has a sterling reputation and seems to have done a good job.
Who wrote this piece for you, Kingfish? You don't have the knowledge, ability or balls to venture out onto this limb.
To @6:40:
If you “invested” in this scam, you are too dumb to walk the streets unaccompanied. That being said, the phony “profits” were nothing more than the money of the next round of greedy imbeciles being passed upstream with the local barrister elite taking their pound of flesh along the way.
There was no investment and no profits, only stolen & laundered money. Take back every dime of stolen gains by those in the early rounds of this scam and divide among the class victims. Any taxes paid on the phantom gains are just punishment for the rapacious cretins who decided to buy investments from charlatans.
10:49 Your overuse of adjectives reflects personal pain and extreme bitterness. I assume your neighbor was an early rounder and you came in at the end.
@10:49
EXACTLY ! Absolute Truth !
I don't know if early investors were complicit.
If they put the profits into other investment accounts to generate more money and the principle is still there, it should be confiscated.
But, if they invested in good faith, used the profits to buy a home, start or improve a business, pay for children's education, donated to a charity etc. and paid taxes, you risk creating new victims.
I'm hesitant to blame Ms. Mills unless there's some evidence that she used favoritism in deciding who to pursue.
Fish,
Excellent banter. Improves the community.
11:36 A.M. Friends? Laughable! On this road called life, people turn on you without a signal. Better look both ways before crossing the road and be careful who helps you cross it. When it comes to money, number one looks out after number one. Ms Mills is looking to keep padding her bank account with her percent of the illegal profit she claws back. She’ll be the winner here. I knew of her from NOLA days and she’s shrewd. She’ll eventually get to the clawing of the illegal profits that have been made. No such thing when money comes into play.
October 13, 2023 at 11:33 AM, is your post a self-portrait? Contrary to your personal feelings, money isn't the be-all, end-all to everyone.
Who are the”local barrister elite?”
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