Friday, January 31, 2020

SEC Drops Hammer on Billings in Ponzi Scheme

The Securities and Exchange Commission issued the following statement.

The Securities and Exchange Commission today announced charges against a Texas company and its principal for unlawfully selling unregistered securities in connection with the previously charged Madison Timber Properties, LLC Ponzi scheme.

The SEC's complaint, filed in federal court in Jackson, Mississippi, alleges that Michael Douglas Billings and his company MDB Group, LLC, were among Madison Timber's top revenue producers, selling more than $80 million of its unregistered securities to at least 44 retail investors. The complaint also alleges that the defendants reaped millions of dollars in commissions and other payments on their sales of Madison Timber's securities even though the securities were not registered with the Commission and defendants were not registered as broker-dealers. According to the complaint, the defendants told investors that their money would be used to finance the right to harvest timber and promised annual returns of 12 to 15 percent. In truth, the complaint alleges, Madison Timber never obtained any harvesting rights. Instead, Madison Timber's principal, Arthur Lamar Adams, forged deeds and cutting agreements and used the investors' funds for personal expenses and to develop an unrelated real estate project.

The complaint charges Billings and MDB Group with violating the securities registration provisions of Sections 5(a) and (c) of the Securities Act of 1933 and the broker-dealer registration provision of Section 15(a) of the Securities Exchange Act of 1934. The defendants have agreed to a bifurcated settlement where they will be permanently enjoined from violating the charged provisions and the court will determine the amount of disgorgement, prejudgment interest, and civil money penalties at a later date. Billings and MDG Group have also consented to industry and penny stock bars to be issued in an administrative proceeding.

Previously, in addition to charging Madison Timber and Adams, the SEC charged Terry Wayne Kelly and Kelly Management, LLC, for their role in the Madison Timber scheme.

The court overseeing the SEC's ongoing litigation against Madison Timber, Adams, Kelly, and Kelly Management appointed a receiver to marshal funds and distribute them to harmed investors. The receiver has established a website, which contains information on the receiver's progress and on relevant federal and state proceedings.

The SEC's continuing investigation is being conducted by Justin Delfino and Krysta Cannon of the SEC's Atlanta Regional Office and supervised by Peter Diskin. The SEC's litigation is being led by Shawn Murnahan and supervised by Graham Loomis. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Mississippi and the Federal Bureau of Investigation.

Kingfish note: What does it all mean? It means the Receiver settled with him for clawbacks of $800,000.  Now the SEC is going after Billings for selling unregistered securities as an unlicensed broker.  Interesting.


Anonymous said...

This appears to be a civil complaint, not criminal, but it's all good.

Anonymous said...

I’ve asked previously but received no response. Is This the Mike Billings who attended Belhaven circa 1980 and involved in College Republicans?

Anonymous said...

Yes I believe he is. Billings attended Belhaven College where he received a bachelor of science in business administration degree.

She won’t survive if so said...

Is any jail time involved?

Anonymous said...

Yes 9:52, that is he. However he converted in later years to being a democrat as he began his career of deception and thievery.

Anonymous said...

The KF is single handedly keeping Jackson honest.

The fact that this went on for so long just proves that this is the tip of the iceberg and you can be sure other Lamar's are out there peddling their own brand of bullshit.

Anonymous said...

yet another in the long line of mississippi scam artists. bernie ebbers, chris epps, lamar adams, this list is 10 miles long. and gad! worst of all....... he went to a "christian" college.

Anonymous said...

"Michael Douglas Billings and his company MDB Group, LLC, were among Madison Timber's top revenue producers, selling more than $80 million of its unregistered securities to at least 44 retail investors."

Am I reading this correctly? That would be an average of a hair over $1.8 million per investor. Somebody would have to be some kind of slick to talk folks with that kind of money into buying a bogus security.

Anonymous said...

903 - go further with your 'long line of scam artists', would like to further see your misunderstanding of the term.

Epps wasn't a scam artist, he was a ctook. Plain and simple - crook. The world is full of them and Mississippi does have its share. But there was nothing about 'scamming' done by Epps unless you count the sell job he put on Musgrove to promote him to Commissioner, then on Barbour and Bryant to keep him there as being a scam.

And Ebbers wasn't a scam artist either. He was a basketball player who got into a small business he kinda understood but when it started growing it way outpaced his management ability. Some of the folks he brought in to manage it's growth were not much better (some were really good) but all those folks who bought stock weren't being scammed into buying something that was worthless. And except for the greedy and the fools who bought and never thought about selling, or those who invested everything they had into the one industry, née the one company, the rest invested and we're able to make money off a legitimate registered stock on the Exchange. Not a true scam.

There have been a couple of good cases of individuals selling 'stock' in non-existent companies to our fine citizens, but they never rose to the scale of having the 's' follow the word 'million'. But just like a critical disease, these were not 'major' deals unless you were one of the folks who bought their worthless paper.

In my view, the only other good scam we have had in recent years would be that one done by the Lane's on the folks who live in 'managed' Homeowners Associations. Now that is a good true scam.

Anonymous said...

Say Cheese!

Michael Douglas Billings yall!

Anonymous said...

The reality is that no people of color were affected by this scheme, very few were offered a chance to get in. And does that were, were smart enough to stay away. And yes as we speak some of them rot in prison for other schemes.

Anonymous said...

Wonder how this effects Matt Thornton at Butler Snow Advisory Group?

Anonymous said...

So am I reading correctly that Billings and his company sold more than 80 million dollars in this timber scam and Billings received 3.5 million dollars in commission, but the receiver settled with him for 800.000.00? WOW unbelievable. By the time receiver gets her third, not a lot left for the investors to be paid back. Sounds like she will be the only one coming out with a pocket full of money. I guess I don't understand her math or connection with Billings. Makes absolutely no sense.

Anonymous said...

Ebbers and Bilings both attended a Christian college.

Adams never went to college. But he swindled a lot of people who did. Looking at you Mr. Wicker.

Anonymous said...

If McHenry managed to skate (with the help of one guilty witness), M.D.Billings will as well. All it will take is for Sgt. Schultz to say, "He din't no nuffin".

Anonymous said...

"Christian College"? What's the suggested value of that in the grande scheme of business? Consider Dr. Lewis Nobles, deposed, prior President of Mississippi College.

Anonymous said...

10:02 it's call Math for Dummies who think they are going to get their money back.

Anonymous said...

To 10:02.
Ms. Mills is doing a great job of clawing back money for those that were scammed. This cat could have let that amount go just to a prolonged legal battle. Putting $800k back to investors is better than $0. Plus, by the time she gets her teeth into BS and BD, they may see that 10% return they were promised. She is saving the big fish for last. Popcorn at the ready. Pucker factor for BS/BD remains at level 10.

Anonymous said...

I can assure you, BS isn’t losing any sleep over this.

Anonymous said...

4:54...What's the relative value of your assurance? Let me guess.

Anonymous said...

BS surely isn't losing sleep over this, between insurance and reserves this peril is no more than an ant bite.

Anonymous said...

@3:42, you know nothing about BS or BD. Motions to dismiss pending.

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