Thursday, October 25, 2018

Billings Battles Receiver in Lamar Adams Case

Michael Billings fired back at the Receiver as she tries to strip him of the commissions paid for selling phony timber investments for Lamar Adams.   Court-appointed receiver Alysson Mills, Esq. claimed Lamar Adams paid Billings commission of $3.5 million.  Mills asked the court Tuesday to issue an injunction that freezes Billings' assets that are derived from the fraud.  Billings stood up and hit back at the receiver yesterday in court.


The SEC accused Lamar Adams of operating a Ponzi scheme that defrauded 150 investors out of more than $85 million since 2005, in a lawsuit filed in U.S. District Court on April 20.   The SEC said Adams sold bogus timber rights, deeds, and promissory notes guaranteeing 13% interest rates.  Mr. Adams pleaded guilty in U.S. District Court to one count of wire fraud.  The Justice Department said in that case Adams defrauded 250 investors of more than $100 million.  The Court postponed sentencing for Adams since he is cooperating with the government.

U.S. District Judge Carlton Reeves appointed attorney Alysson Mills to be the receiver in the case.  She will recover assets, distribute them among the victims, and provide progress reports to the court.  Mills sued  to recover over $16 million in commissions from several "promoters". The promoters allegedly helped Adams sell his phony timber investments to unsuspecting investors.  The defendants are Michael Billings, William McHenry, and Terry Kelly as well as companies they own.


Mills didn't pull any punches in her case against Billings.  The complaint charges:

Billings became a recruiter for Madison Timber by no later than 2012, while he was employed by Butler Snow Business Advisory Services, LLC (“Butler Snow”). Madison Timber paid Butler Snow a monthly retainer for “strategic business development, strategic financing/capital strategies and overall management advisory” services. Butler Snow and Billings introduced Madison Timber to potential investors and Madison Timber paid Butler Snow and Billings a “success fee” when an investor invested.

In December 2013, Billings left Butler Snow for the prospect of recruiting new investors to Madison Timber fulltime. Adams agreed to pay Billings 2%, and later 2.5%, of each dollar of each investment made by an investor that Billings personally recruited. In addition, Madison Timber paid Billings a fee of $10,000, and later $12,500, a month. These agreements were honored until the collapse of the Ponzi scheme in April 2018.

Among Adams’s “bird dogs,” Billings was a standout. On information and belief, when Adams met Billings in 2012, Madison Timber had annual investments of approximately $15,000,000. With Billings’s help, the Ponzi scheme ballooned. Billings targeted large investors in Texas and California, often dropping certain investors’ names to attract new investors. On information and belief, Billings personally “booked” more than $80,000,000 in investments in 2017 alone. Billings was always hunting for “more, and more and more!!”
Ms. Mills digs the grave of guilt even deeper for Billings. Billings allegedly told investors the investments were secured by the timber deed.  However, Billings "knew or should have been aware" that he was perpetuating a fraud. The "landowner's signatures" on all the deeds looked the same as they were forged by Adams.  A call to any one of the landowners would have revealed the forgery.  Madison Timber had no contracts with timber mills yet Billings never attempted to verify the existence of the contracts he claimed existed.  Madison Timber made the investor agree to not record the deed at the courthouse unless the company failed to make a payment.  The interest rate was 300-400% above comparable investments.  The market price for timber was substantially lower than the price advertised by the Adams and his boyz.

Billings also was the financial "guru" at Butler Snow and was thus "paid to understand" the business of Madison Timber.  Billings couldn't brag enough about his partnership with his fellow fraudster:

In  August  2017,  Billings  celebrated  his  “fifth  anniversary”  with  Madison  Timber.   He thanked Adams for the “exceptional association and collaboration” and said “it is truly amazing what we have accomplished together.”  He reflected: “I can’t decide whether ‘The Odd Couple’, Grumpy Old Men’ . . . or at this point perhaps just ‘Big’ would be the best title to describe us. .  . I can only conclude that it is ‘A God Thing’!!”
Billings asked the Court to dismiss the count against him and his company, MDB Group, yesterday.  The count asked the court to order the disgorgement of all commissions earned in violation of 15 U.S.C. 77e and Mississippi Code 75-71-301.  She said he violated the law by selling the promissory notes, which she classified as unregistered securities. 

Billings said that "neither statute" gives her the power to disgorge his commissions. Link to code section.    The Mississippi Code section cited merely states that it is unlawful to sell unregistered securities.  Here is the entire statute:

It is unlawful for a person to offer or sell a security in this state unless:
(1) The security is a federal covered security;
(2) The security, transaction, or offer is exempted from registration under Sections 75-71-201 through 75-71-203; or
(3) The security is registered under this chapter.
 The response hints (p.7) that the purchasers of the bogus promissory notes, i.e. the victims, may have a remedy against the "seller" but that remedy does not apply to the receiver.  

Billings said that Mills had "little interest in a good faith effort to negotiate a resolution."  Mills allegedly presented him with a "scathing complaint, rife with factual inaccuracies, along with the threat to file it if, within five days" if Billings did not agree to her demands.   She demanded that he waive his rights to discovery and trial, agree to an order preventing him from spending $7,500 (total amount, not monthly) for living expenses, and agree to a deadline of 15 days for settlement negotiations.  Billings asked for a period of thirty days for negotiations but to no avail.

Billings accused Mills of moving him "to the top of her hit list" while trying to strip him of his rights.  He said he "deeply regrets ever meeting Adams" and is "mortified that he has put his friends in harm's way."  Billings further protested the alleged rush to judgment:

Sixty days to judgment, with no discovery for Mr. Billings, unless he is successful in persuading the Court to grant him leave to conduct limited discovery — this statement fairly summarizes the procedure being pushed by the Receiver. Small claims in county court provide for a fairer process than this, but according to the Receiver, this plan provides Mr. Billings enough protection to allow her lawfully to take everything Mr. Billings has to his name....
 To his great regret, Mr. Billings became associated with a man who operated what appeared to all the world to be a well-regarded company, but was secretly designed to defraud even highly sophisticated business people out of their money.  The Receiver in this case is now after everything Mr. Billings owns, and he should not be required to defend himself against the  sophisticated, fraudulent actions of another man and a court-empowered Receiver by the limited means of a 60-day summary proceeding.  The Rules exist for a reason, including circumstances exactly such as this.  Mr. Billings should be granted the time and procedural resources necessary to investigate and conduct discovery in order to make meaningful showings on the legal defenses to which he is entitled.
So much for going away quietly after signing a piece of paper.  Stay tuned. 


Earlier Posts
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!!!

28 comments:

Anonymous said...

Why is Butler Snow not a target? They have the deep pockets and the E&O Insurance coverage. Maybe she is rolling up the little guys before she goes for the big ones?

Anonymous said...

Everything I have read about this tells me that he should go to jail and give up everything he ever got from this, but I'm afraid I agree with him about due process. I'm not a lawyer, but I've always wondered how an auditor or in this case a receiver just makes demands and then that person is supposed to hand it over. That may be the law, but is seems to run counter to common sense and innocent until proven guilty. This seems almost like the civil forfeiture laws on a bigger scale.

I wonder if this civil action is trying to be leveraged to help him not be charged criminally, too.

Anonymous said...

I knew Alysson at Ole Miss. She is tough. This will get more interesting

Anonymous said...

Any predictions re Adams’ sentencing next Monday?

Anonymous said...

I'm sure the ones he screwed over fell sympathy for him losing everything. I am guessing Billings is trying to pull the whole I'm a dumbass and got defrauded too card. He knew exactly what he was doing and got caught and its time to pay up.

I agree Butler Snow is on the hook. There is no way they can't be.

Anonymous said...

This action further assures the victims will recover even less money and assures that the lawyers handling this case will be able to bill many more hours. This may not stop until the 2 or 3 million dollars recovered has been depleted. At that point where there is no more money, this case will come to an abrupt halt.

Anonymous said...

The auditor is making demands and if you can see the train coming you try and negotiate an out. If you go to court you spend lots of defense money and still may pay the full amount being asked. All your doing is cutting your losses, not timber, get it! I'd say the squeeze is on the smaller guys and Butler Snow will be brought in as a New Years Eve present. They will paint them as should have known that the return was not reasonable and that they advised them incorrectly.

Anonymous said...

@ 1:42..

Whatever the sentence is, it won't be enough. This bastard stole a lot of money, all while carrying a Bible. IMO, the worst kind of thief.



Anonymous said...

Why aren't they charging all these guys with mail and wire fraud? Or RICO? Jail time. And forfeiture. These all seem to be slam dunkers within the SOL easily.

Or, is that the Sword of Damocles that no one has yet mentioned, in order to get the rich guys their unearned wealth back, in part, more quickly?

Anonymous said...

Lock them all up, receiver included

Anonymous said...

If he was carrying a bible he can't be guilty.

Butler-Snow - too big to fail.

Anonymous said...

With all the bolding, etc, it's impossible to tell which remarks are made by the receiver, or others, and which are parenthetical comedy offered by the host of Jackson Jambalaya.

Anonymous said...

I love how Televangelist Taggart is representing the guy that screwed a bunch of angel investors, many of whom were plucked from church relationships, in this matter. He is well out of his league and I predict some Houston or Dallas white collar guy will show up in due time.

Anonymous said...

I feel so "great" that his representation has an office located in the Merrill-Lynch Building where my IRA is being slaughtered right now.

That is all.

Anonymous said...

@3:59pm because the justice system does not exist. We have a legal system that is plagued with politics.

Anonymous said...

Lock them all up, receiver included

Thank you, Enoch Sanders, for your input.

Only a mentally ill individual -- or a Democrat resident of Jackson -- would not understand that the RECEIVER is the person who is trying to recover as much money as possible for the victims of the fraud. Shall we lock up the judge, too?

Seriously. You're stupid.

Anonymous said...

at 5:19 PM = almost smart enough to invest in some of them timber leases, but when he asked his pastor for guidance the pastor done got 'em all bought up first!

Anonymous said...

Anyone seen Mike Hurst?

Anonymous said...

Andy knows nothing about this area of law.
Watch for a smack down.
Inherent in the law is the notion that if you commit fraud you don’t get to keep the spoils.
The receivers authority is vast and sweeping and Andy’s chicaney aside....Billings will pay up.


AbeFroman said...

I call BS on BS saying that they did not know that this scheme was BS. Can anyone tell me how BS Bus Advisory actively engages in the practice of law without licensed attorneys? Or how they split revenue with the law firm? I'm just a simple person with little understanding of street smarts and how to beat the system for another buck.

Anonymous said...

With all the money Billings was making in commissions I am sure he would have invested a portion of that in the timber deals. Correct?

Anonymous said...

@10:58 makes a great point. If he believed so strongly in the product he was selling, he no doubt invested his own money there. If he didn't, he's pretty much screwed because it's then obvious he knew something was amiss. He should get his day in court, but I don't see this ending well for him.

Anonymous said...

Attn 3:59 Billings would have been a fool not to invest if he believed in the product. His 1 year return would have been roughly 10 % commission on top of a 12% interest rate, or an annual return of 22% or higher. I would love to hear an explanation if he did not invest in this "product."

Anonymous said...

To AbeFroman - it is legal for a law firm to sell busines services under a supreme court ruling. The supreme court is all about bidness.

Anonymous said...

Let's talk about McHenry and what he gained and stood to gain? Did he invest in the product he was hawking? Surely he did. Or was he opposed to becoming a millionaire - Just wanting to help folks out with their portfolios.

We know, by his prior posts, that he stays on top of this blog thread, so I feel sure he'll belly up and answer.

Anonymous said...

Isn't this the day Lamar Adams gets sentenced?

Anonymous said...

Yep

Anonymous said...

Andy will advise Billings to fight this frivolous, unsubstantiated suit until all the $3MM of Billings commissions have been paid in legal fees. After all, that is what Billings wants to hear. He will then tell Billings to throw in the towel and try to make a deal. Certain types of lawyers are predictable.


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