Two men enter, only one man leaves. Mad Max Beyond Thunderdome
The showdown between Madison Timber Receiver Alysson Mills and Baker Donelson is finally underway in U.S. District Court eight years after she sued the prestigious law firm to recover profits allegedly made in the Lamar Adams Ponzi scheme.
Baker Donelson then-partner Jon Seawright and its lobbyist, Brent Alexander, sold investments in Madison Timber for Lamar Adams. Both men pleaded guilty for their roles in promoting the Ponzi scheme. Seawright served a year in prison and was released in 2024. The Court sentenced Alexander to probation.
Mills tried to pin their activities on Baker Donelson. However, Baker Donelson fought back and fought back hard as it deposed numerous Madison Timber victims and investors.
Washington super law firm Williams & Connelly and Jackson law firm Watkins & Eager represent Baker Donelson. U.S. District Judge Carlton Reeves presides over the case.
Jury selection concluded yesterday. Opening statements were made this morning.
Note: Lamar Adams might be making a special cameo appearance as he is currently residing in the Madison County Detention Center.
December 20, 2018 Post
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. They began pitching the investments to Baker Donelson clients:
75. 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 claims 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.”
Remember when the Kingfish pointed out that Baker Donelson was promoting Alexander’s financial expertise on its website back on May 4?
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.
Well, the Receiver noticed as well:
81. Alexander and Seawright referred potential investors to Baker Donelson’s website, which shows that Jon Seawright is not merely a shareholder in Baker Donelson’s Jackson office but an elected member of the firm’s national governing Board of Directors. Baker Donelson is a law firm, not an investment advisory firm, but its website touts Jon Seawright’s advanced degree in taxation and “extensive experience” in business development and capital formation. Its website presents Brent Alexander as a “Senior Public Policy Advisor” who is qualified by regulators to serve as a principal in, or advisor to, hedge funds and who has a “rapidly growing” practice in “advising venture capital and related investors.”
82. Baker Donelson knew Alexander and Seawright relied on their affiliation with Baker Donelson in securing investments and allowed it.
83. Alexander and Seawright used Baker Donelson’s Jackson office’s address for official business. They and Adams held “closings” at Baker Donelson’s Jackson office. They used Baker Donelson’s runners to pick up investors’ checks.
84. Alexander and Seawright enlisted their colleagues at Baker Donelson, including in offices in other states, to introduce them to potential investors. They asked their colleagues to “[h]elp us get a meeting if you’re able,” adding “[i]f you can get us in the door, it would mean a great deal.” Their colleagues obliged.The next section in the complaint is appropriately called "easy money" (p.23). Ms. Mills charges 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 acted as unlicensed brokers, a violation of state and federal law. Unfortunately for more victims, the Baker Boyz actually started thinking and not in a good way:
101. In 2015 Alexander and Seawright had an idea. They had been making monthly investments with Adams of between $100,000 and $500,000 using other people’s money. Alexander proposed that “[we] systemize this a little and take it to the next level.” Over the next two years Alexander and Seawright would brainstorm a new model that could make Alexander and Seawright rich. Alexander estimated that if a fund put $1 million in Madison Timber and then reinvested the principal and interest each month for ten years it would make $17 to $18 million. What if the fund put $10 million in?
102. The idea consumed Alexander. He texted Seawright, “Woke at [sic] at 2 thinking about the structure of the timber pool. We pull this off, we get rich.” Using Baker Donelson’s conference rooms and resources, he hosted meetings with and made presentations to accountants, investors, and advisors to push his idea and debate the merits of a five-year versus ten-year model. He reported the models gave people “much more level headed” than he “an orgasm as to its potential.” Fearing that “now that they have seen up our skirts” people will “try to cut us out,” he had prospective partners execute a non-disclosure agreement that Seawright drafted.
103. Alexander and Seawright gave their new model a new company and named it Alexander Seawright Timber Fund II, LLC.However, they had problems pitching the new venture as prospects. One investor pointed out that the Baker Boyz were not invested in the fund and thus had no "skin in the game." However, they found their pigeon in a Baker Donelson client who had just sold a major asset. The "key investor" placed $6 million in the fund. Unfortunately, the investor was burned:
112. Just days before Alexander and Seawright would have deployed their “key investor” and client’s money, Adams turned himself in. As news spread, the investor sought information from Alexander. Alexander told the investor that Alexander and Seawright were victims:Victims Indeed
Investor: How did you get hooked with him?
Alexander: My clients are hanging with me. They know I am a victim.
Investor: To think I was almost out of my entire life earnings makes me shiver
Alexander: Everyone knew him. Country club fixture.
Alexander: Would not let you lose your savings. Investor: Man it was close ...a day or two...
Alexander: To be clear, Jon and I were the victims of fraud.
Aiding and Abetting: All defendants
Gross Negligence: All defendants
Violation of Mississippi Fraudulent Transfer Act: Butler Snow Advisory, Thornton, Alexander Seawright, Alexander, Seawright
Mississippi RICO Act: Butler Snow Advisory, Thornton, Alexander Seawright, Alexander, Seawright
Joint Venture Liability: Alexander Seawright, Alexander, Seawright
Attorney Malpractice: Butler Snow
Negligent Retention & Supervision: Butler Snow, Baker Donelson
36 comments:
Honestly don’t see what Baker Donelson did wrong here. If they win at trial that would prove to be a big waste of receiver assets.
This write up describes Seawright and Alexander’s activities with their timber fund llc.
What about the law firm? Did they charge for these activities?
How much was BD paid?
BD should have to pay for their shenanigans. They knew exactly what they were doing.
You got Lamar Adams on one post and Nancy New on another….
Jackson Academy most be proud
Baker is gonna get whacked
BD: “you can invest $200,000 in the timber rights which yield unprecedented dividends.”
Investor: “Great. Here’s my check you!”
BD: “Oh, uh, don’t file the timber deed in the land records. It would mess things up.”
Investor: “You’re the lawyer. You know what’s right.”
7:26, if you were an investor and asked any lawyer not associated with this whether to invest without a recorded deed, you would have heard an overwhelming majority say, “hell no!”
This was an appalling act.
RMQ
BD appears to have been plausibly involved in the "systemized" fraud, simply by the fact they promoted and furthered the ponzi scheme of the fraudsters employed under their umbrella.
But justice is blind, supposedly, and attorneys are advocates, either of their client, or in this case, their own defense. Ignorance is also blind, but it should never be a defense for financial fraud.
Not a good look for the ethics of BD as a law firm that we can assume extended representation of clients - by their association with BD employees - who deposited funds, and lost said funds to individuals associated with the firm.
Mills should include testimony from the victims, as the fraudulent crooks were employed and lauded by BD. Appears to be a slam dunk case, until the high dollar lawyers show up.
That's why all of this is so dicey......many of the so-called "victims" are prominent Mississippi names who knew full well that BD was working an angle, and they were looking for a quick/easy profit - and they do NOT want their names - much less their testimony - in the public sphere due to their stupidity, or their knowing corruption. Even KF won't list their names.
8 years later is a fuggin joke as nobody remembers or cares
justice delayed is no justice, and if u disagree, I have an investment opportunity just for you… call Butt Snows for my lawyer lobbyists
The fact that there are genuine issues of material fat which a jury has been seated to decide presents a real risk for BD. Their SIR is probably $5,000,000 so their lawyers have been chewing through that for the last few years. Once the insurer is exposed the case might resolve. Or alternatively the insurer may be defending under a reservation alleging th conduct isn’t covered under their policies. This is an unusual case.
I'm hiding the victims? How? Such information has not been made public. Period. Why do you need to know so bad? So you can make yourself feel superior to crime victims? Want the chance to embarrass the upper class?
and the clawbacks are next? there's your real story
Someone I knew about a dozen years ago told me about those two guys and their inv
There is no claim that Baker received a penny from the scam or that it’s management knew about it.
Truthfully, if I had to bet on this case, I'd place my money on Baker.
“Honestly don’t see what Baker Donelson did wrong here.”
7:26, it would be like me allowing drugs to be sold out of my house or letting prostitutes use my spare bedrooms. I can say I did nothing wrong, but I would be at fault for allowing it.
When a member of your executive committee is one of the ones committing fraud his partners “know” about it. If that same member put firm clients in it or at risk? That’s a problem. The jury instructions will be interesting to read and I bet KF posts them as soon as he can.
If BD claimed to inspect the land; yet timber land did not exist the. It is Fraud! Plain & simple. I hope Mills wins!
Pretty sure Baker never made a penny off this. The money went directly to Alexander and Seawright, as I understand it. It's not like they were charging an hourly rate which Baker got a piece of.
Your blog is exceptional 99% of the time King in exposing corruption in advance of anyone else....but with this story, you've got some cold feet or something.
I'll give you one "victim" name that you repeatedly do not want Mississippians to know is on that list:
Roger Wicker. Victim my ass.
Were there any 'investors' with Alexander and Seawright that subsequent to 'investing' in the timber scheme paid Baker for legal work?
11:31, yes. this is how A&S picked who to pluck--from clients of BD they knew had money to invest. i will bet against kf
So if I go into a partnership with other people and two of the partners engage in a side hustle which is illegal that I had no part of and did not profit from, I am responsible for whatever outcome results from that side-hustle? Why would ANYONE go into a partnership if that is the law?
In my opinion, the jury verdict will come down to how the jurors feel about the question of whether BD management knew, or should have known, about the side hustling of Alexander and Seawright.
It is not a side hustle if a business is used as part of the hustle. There clearly appears to be liability here, but who knows what happens in the court room.
If it sounds too good to be true. It probably is as. Many parents told us!
Given Butler Snow's settlement, what exactly did that firm do/know?
So Butler Snow settled for $9 million to avoid a trial. Baker Donelson is going to trial to dispute the charges. Says a lot right there.
being fake rich and name-dropping other peoples wealth is a favorite pastime for that class of individuals
The entire grift was based operating off of the Baker Donelson name, giving it "credibility". BD is culpable. They will scream, "But there's no paper trail or proof". Perception is reality however, especially in a theatre, ahem - court room.
Macy at 3:26, I suspect you are correct, but is BD claiming it did not know what its partner and its deal-maker associate were doing? IBD is claiming that it is walking on thin ice.
RMQ
Would an important law firm have some sort of ethics policy in place which would cover outside business ventures by partners and other personnel? Possibly in the interest of protecting the firm and it's partners by the prevention of conflicts of interest or involvement in outside business relationships which might impugn the good reputation of the firm?
Would an important law firm have some sort of reporting policy for partners and other upper management level employees where outside business interests are required to be declared to the firm?
If an important law firm had any such policies would the important law firm do any internal verification and/or third party verification to ensure compliance with any such policies they might have in place?
It seems as though this type of thing might be explored by plaintiffs in discovery and/or depositions.
BD of Jackson knew, many partners were invested in the BD timber fund. Pitched as the BDFund. Why would BD invest millions in Washington law firms to depose 150 victims? What is the story about professional liability coverages? The court has frozen all other action for legal malpractice for years to get to trial. The facts will show BD knew, BD lawyers participated, BD pitched “ the BD fund”, BD benefited. Why was there a failed settlement?
Because like most of Mississippians - they have a pathological ability to deny the truth when it's so glaringly obvious, then go to church and talk about how righteous they are.
This looks like a case of you buy your teenage daughter a used car to drive to school, but you didn't get a title. Also, the car may be stolen. Next, your daughter gets pulled over & arrested for driving a car that had an APB out on it for a robbery last week. Ans since you bought the car they come after you also. Now, you MAY NOT have known the history of the car, or you MAY have been involved with it's circumstances. Oh well, fun for us to watch any way...
This looks to me like a senerio where you buy your teenage daughter a used car to drive to school. But you didn't get a title with the car. The next week your daughter is arrested for driving a car that was used in a robbery & the LEO has had an APB out for. And since you bought the car they arrest you also. Now, you MAY or MAY NOT have known the history of the car
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