One of the main promoters in the Lamar Adams Ponzi scheme settled with SEC Receiver Alysson Mills for $800,000. Michael Billings was the "star" promoter of Adam's scheme as he received commissions of $3.5 million for the phony timber investments.
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. 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. Adams is currently incarcerated in federal prison after he pleaded guilty to one count of wire fraud.
Ms. Mills sued Billings, Wayne Kelly, William McHenry, and their respective companies in October 2018 for the commissions received for the sale of the phony timber investments.
The Complaint
Ms. Mills said in her complaint:
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.Billings allegedly told investors the investments were secured by the timber deed. The complaint said Billings should have known something was amiss. Ms. Mills said the "landowner's signatures" on all the deeds looked the same as they were forged by Adams. She argued 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.
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!!”
The Receiver said Billings was the financial "guru" at Butler Snow and "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’!!”The complaint also states that Billings and MDB Group received Madison Timber commissions of $3.5 million between 2013 and 2018.
The Settlement
The Receiver said Billings earned $3.5 million in Madison Timber commissions from 2013 to 2018. However, Billings will only have to repay assets of $800,000. The assets are:
- $325,000 in cash
- Interest in Oxford Springs, LLC (Earlier post about Oxford Springs development)
- Promissory note to repay $500,000. However, Billings can cancel debt if he repays $187,500 in 1 year, $250,000 in 547 days, or $312,500 in 730 days.
The Court and the Receiver are mindful that if Billings required the Receiver to litigate her claim against him to final judgment, Billings would be unable to pay the final judgment and likely would file for bankruptcy. If Billings filed for bankruptcy, the Receivership Estate would compete with other creditors for a share of Billings’s assets. The final judgment would be virtually uncollectable.
The Receiver would spend considerable time and money litigating her claim against Billings to final judgment. Billings also would spend considerable time and money defending against the Receiver’s claim. The time and money spent on litigation, which currently is being funded on an hourly basis, is time and money the Receivership Estate would never recover.
Attorney Andrew Taggart represents Billings.
Kingfish note: Some clawback. Will she ever go after any investors such as the ones who got their money as well as the interest?
36 comments:
So Billings screws everyone, gets to keep $2.7 million and no jail time? How do I apply for this job?
Mike has always made a living in sales. Fine jewelry, investments and now a ponzi scheme. Who would buy anything from him now?
Not a bad deal at all. Taggart worked out a fine arrangement for his client.
Steal 3.5 million dollars and pay back only 800 thou.
That comes to repaying 22.857% of the ill-gotten gains. Or another way to look at it is he gets to keep roughly 77% of what he ripped folks off for.
Did Mills squeal like a pig when she agreed to this screwing?
Hope he gave good info on butler snows actions during his tenure.
22.9% guaranteed recovery. I guess it’s actually a bit less if Billings meets the payment benchmark date(s). Does that match the percentage promised to investors? Asking for a friend. Yet another “alleged” white collar criminal that takes his public rebuke & financial slap on the wrist while holding on to the majority of his spoils. At least this scam wasn’t largely on the backs of the working class.
So Andy Taggert represents Billings? That's a reason for him to drop out of the AG race. What a hypocrite.
So he’s “Andrew” when he’s cutting sweet deals for scam artists and “Andy” when he’s asking to be our Attorney General?
if andy taggert can work out a deal like this for a criminal flim-flam artist, just think what a great job he will do as AG.
Is Lamar still hiring? If Mills will cut me the same deal, I’ll give her 800k for $2.7 mil.
A friend of mine who got taken said he would much rather make this guy go broke than recover one dime. This reeks of malpractice or worse. Maybe she is the one that now needs investigation.
"...is time and money the Receivership Estate would never record."
What? I thought that she was paid out of a federal fund.
This is rewarding bad behavior.
I hope he didn’t spend it all on Mercedes, Prada and handbags.
Mills folded like a wet napkin-
That's just dumb and shows what is wrong with America. What you going to do? Vote against a doctor or CPA who runs for office based upon their patients or clients?
Everyone has the damn right to representation, period. That's one of the things America was founded on, the #metoo crowd and Harvard notwithstanding.
Incredible. It would seem that even if he WAS able to make everyone completely whole, that jail time would be the end result.....is there more to this story KF? Did he give up the really good stuff on BS or BD? This story is sickening if Lamar is the fall guy for it all.
Billings screwed some pretty wealthy people who still hold a grudge....wonder if this now opens the path for litigation of the screwees against the screwer?
3. Promissory note to repay $500,000. However, Billings can cancel debt if he repays $187,500 in 1 year, $250,000 in 547 days, or $312,500 in 730 days.
Am I reading this correctly, that he owes $500,000, BUT he can cancel that debt if he strokes a check for $187,500 in year one? Basically meeting any one of those benchmarks will allow him to pay a lesser amount?
How does this receiver make decisions on criminal consequences?
KF- you're missing the point. No one put a gun to Tag's head and made him represent this low life. I'm a member of the MS Bar, and I (thankfully) have the ability to accept or reject prospective clients. There's fair representation, and then there's advocating for some POS to get him off the hook for way less than he deserves. I understand judicial economy, and that "time is money", but the plea here seems pretty disproportionate to the crime committed. Not that any of the money he helped steal is still around...
One used to hope your child would be a doctor or lawyer. Sadly, the legal profession has allowed itself to lower their standards of representation such that becoming a lawyer commands little to no respect due to all the ambulance chasers. Taggart's website doesn't mention practicing criminal law, so perhaps he needed the billings to run for AG.
I agree with 3:39. Allyson Mills is way too smart to give this type of a deal without getting valuable information in return. She got what she could out of Billings, with all of the collection problems that presents, along with a bunch of information about the law firm defendants. That is where the Real Recovery lies.
KF, I don't think anyone is saying that Michael Billings did not have a right to representation. I think the sentiment, one with which I agree, is that it is all right not to vote for Andy Taggart as Attorney General. I'm certainly not a fan of the other Republican candidates for that office, but the idea of electing the attorney for Michael Billings to be in charge of consumer protection in the state of Mississippi is very troubling.
would someone please explain to me why this billings guy has not been indicted? if his defense is that "i just didn't know this was a ponzi scam".......well thats about as believable as the piano player in the whorehouse who says he doesn't know whats going on upstairs.
What is going on with that McHenry man? He ought to be ready to settle after reading about this man's settlement.
What is going on with Seawright and Alexander? The only folks I know that invested did so through them, and they seem to be acting like not a care in the world. Was this all planned--for it to fall apart as it did, with no real consequences?
Crime doesn’t pay....Oh, wait, never mind.
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100% agree, KF. Andy represented the client well. And Mills was not a pushover. They both guaranteed a payment that may have otherwise been questionable.
Standing by for superceding indictments in 5, 4, 3, 2, 1...
All this legal jargon and not one damn mention of who gets the black velvet Louis Viton slippers....
Andy can make his money any way he wants and we as voters can make our choices any way we want. Sure, we can hold who Andy does legal work for against him. Do not compare a lawyer with a doctor. This still America for a few years more.
I am a math guy: Billings took in $3.5M over a period of 6 years. Let's assume he paid an effective 35% rate in federal and state taxes, leaving him with $2.275M, or approximately $380K/year on average (plus any other income he generated - unless he was exclusively hawking Adams' timber scheme). He settled for $325K in cash and a $500K promissory note. I would certainly hope that the receiver would have gone after most of his liquid assets as part of the up-front settlement, so that would imply that he probably has less than $500K in liquidity.
I wouldn't know Billing if he sat in my lap, but based on what some others have posted here and elsewhere, it sounds like he is perfectly capable of spending $300K or more a year, so perhaps Mills actually did take Billings for most of what he is worth today. If that's the case, then those poor victims paid for his lavish lifestyle over the past few years, and there is precious little left to return to them. Damned shame.
Who, other than Tom Head, is the least bit interested in black velvet slippers?
@2:24. They aren’t just “black velvet slippers”. OMG. They are Black velvet Louis Vuitton slippers
Not many lawyers commenting, which is a good sign. They're ethically bound to be discreet. But I'm betting safely that if you had access to the client list of every law firm in this area, or any other area, you would find more than a score of instances, or more, of the representation of clients who are less than stellar citizens. It may be a cheap thrill to mock Andy Taggart or one of the large firms, but I encourage the trollish ones hereabout to think, just once, before they comment on issues far beyond their expertise.
I won't hold my breath, but I'm always delighted by signs of rationality. And I see such evidence a lot from KF and from a whole bunch of folks who comment here. I hope none of us ever needs a lawyer, but if you do you will be happy to have him or her. BTW, Ms Mills did the right thing, and Taggart should be complimented for working it out.
Ok. 1. Billings spent nearly all the commission money he received in the 4 or so years he defrauded investors. He was living high. Ms. Mills got everything she could out of him I’m certain as she was privy to his balance sheet. We aren’t.
2. There is nothing in this settlement which prohibits individual investors from suing Billings independently of the receiver. Taggart would’ve wanted and requested that but he didn’t get it. Everyone that Billings defrauded can sue him independently and their lawyers know that. This is not over for him. Years of litigation likely ahead. Taggart settled with Ms.Mills for everything his client had available while leaving his client open to dozens of individual lawsuits. Hmmm.
3. Not sure where the feds are, but Ms. Mills can’t indict.
Done. Good stuff!
"Taggert settled with Ms. Mills for everything his client had available while leaving his client open to dozens of individual lawsuits." I doubt this was all he had. He also had enough to pay Taggert (I assume). It would not hurt to open a audit and examining Mills' (and families) various bank accounts including off shore. If funds are found hidden away, this is a de facto admission of knowledge of the fraud.
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