Wednesday, June 22, 2022

TIMBER!!! Pinnacle Paid $500,000 in Lamar Adams Case

The Madison Timber tree finally fell on Pinnacle Trust after U.S. District Judge Carlton Reeves approved a $500,000 settlement between SEC Receiver Alysson Mills and defendants Pinnacle Trust and Stacey Wall in March.  A 2018 lawsuit accused Pinnacle of selling phony Madison Timber investments but the lawsuit was dismissed due to the Receiver's own lawsuit.   Mr. Wall is the former CEO of Pinnacle Trust.  He left the company earlier this year. 

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 recovers assets, distributes them among the victims, and provides progress reports to the Court.  Adams is incarcerated in federal prison for 19.5 years after he pleaded guilty to one count of wire fraud. 


 

This particular thread in the Madison Timber web began four years ago. JJ reported in June 2018: 

One more tree fell in the the Lamar Adams Ponzi scheme wreckage.  A victim sued Pinnacle Trust Monday in Madison County Chancery Court but withdrew the lawsuit without prejudice Wednesday.  Pinnacle Trust was the trustee of her trust.  She accused Pinnacle of investing her money in the timber scam several years after it advised its clients not to invest in the same scam.  

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 in a massive but phony timber  investment scheme. Victims received phony property deeds in exchange for their investments. 

Dorothy Lehan and Pinnacle Trust agreed to establish the Dorothy Lehan Second Trust in 2005.  Pinnacle is trustee and thus has a fiduciary duty to administer the trust.  Jeanne and Pamela Lehan are the trust's beneficiaries.  Dorothy died and Pinnacle divided the shares between Jeanne and Pamela per Dorothy's instructions and held the assets in trust for the pair.

Jeanne stated that she created an LLC, Foxglove, at the "direction" of Pinnacle Trust.   The LLC was formed in 2010.  The Secretary of State's website states Pinnacle Trust became the registered agent for the LLC in 2013.  The stated purpose of the LLC is "timber tract operations."

The plaintiff places the blame for investing in the bogus timber scheme at the feet of Pinnacle Trust:

17. At all times relevant hereto, Foxglove, by and/or at the direction of Pinnacle Trust, or based upon advice from Pinnacle Trust, was engaged in the business of making loans to Madison Timber Co., Inc., Madison Timber Properties, LLC and Lamar Adams (collectively referred to as "Madison Timber") . The purported purpose for these loans was to enable Madison Timber to purchase, harvest and sell timber on properties located in the State of Mississippi and elsewhere.These loans were, for all practical purposes, unsecured loans as the only purported collateral given to secure the loans were unrecorded Timber Deeds and Cutting Agreements.

18. In making these loans for and on behalf of Foxglove, and as Trustee of the Jeanne Trust and the Pamela Trust, Pinnacle Trust did not perform adequate due diligence or investigation as to the credit worthiness of Madison Timber or the value of any purported collateral offered by Madison Timber as security for such loans. By way of example, Pinnacle Trust did not obtain from a licensed and adequately insured attorney any certificates of title or title opinions on the properties which were the subject of any Timber Deeds purportedly conveyed to Madison Timber or conveyed by Madison Timber. In addition, Pinnacle Trust did not require Madison Timber to provide a certificate of title or title opinion as mentioned above from a licensed and adequately insured attorney.

Pinnacle Trust issued the following statement to its clients when the scandal first broke: 


However, Ms. Lehan claimed Pinnacle did not notify her of its concerns about Lamar Adams. 
21. Unbeknownst to Jeanne and Pamela, beginning in or around January of 201l, Pinnacle Trust determined that loans to Madison Timber did not qualify as a suitable investment for its clients and Pinnacle Trust advised most of its clients, but not Jeanne and Pamela, not to make loans to Madison Timber or otherwise invest in Madison Timber. Pinnacle Trust, which indisputably knew that both the Jeanne Trust and the Pamela Trust were invested in Foxglove and Foxglove's only asset and source of income was loans to Madison Timber, did not disclose to Jeanne and Pamela the information they had concerning Madison Timber or that Pinnacle Trust had advised most of its clients not to loan money to Madison Timber or otherwise invest in Madison Timber.

22. As it turns out, Madison Timber was nothing more than a Ponzi scheme perpetrated by Lamar Adams and others. The Madison Timber Ponzi scheme is the largest Ponzi scheme perpetrated to date in the State of Mississippi.

Pinnacle allegedly did not notify Jeanne about the bogus nature of the scheme until April 28, 2018.  Pinnacle sent her a statement on May 1 that stated Lamar Adams was indicted for the fraud. 

The complaint charges Pinnacle Trust with breach of trust,  breach of fiduciary duty, breach of loyalty, and gross negligence.  Jeanne asks the court to award her all money lost in the timber fraud, Pinnacle's fees, and punitive damages.

Attorneys Todd Burwell and John Davidson represented the plaintiff. 

The plaintiffs withdrew the case and it became wrapped up in the Lamar Adams estate in federal court.  

Pinnacle Trust agreed to pay $500,000 within seven days after Judge Reeves approved the order.  Judge Reeves approved the settlement on March 7.


20 comments:

Anonymous said...

Who was the CPA firm for Adams and Madison Timber, during this time?

Anonymous said...

I looked that Walls guy up on FINRA, the web site for looking up registered reps. That Walls guy apparently did not even have a securities license until 2021, and did not retain it very long. Why is he not sharing a cell with Lamar Adams?

Anonymous said...

That should just about pay Ms. Mills' bill to date.

Anonymous said...

12:29, do your own research, and let us know what you find out.

Anonymous said...

Any chance this Walls guy will go to prison. With all of the licenses you have to acquire and update annually after acquiring the various licenses, surely he was in violation of numerous rules and laws
Weren’t there others with Wall’s company who have already been punished and suspended?

Anonymous said...

1:08, lmao. They'll be knee deep in the saga before they reach that part of the story.

Anonymous said...

@1:23 and @12:53... You do not have to have a securities license to be a trust officer or to run a private trust company. The jurisdiction lies with the department of banking rather than the SEC or FINRA. Pinnacle just recently converted into an RIA and is under SEC regulation now.

Trust companies are notoriously bad with regards to investments. Nearly every trust company from big companies like Regions, Trustmark, and Argent to small private ones like Pinnacle Trust have been sued multiple times for lack of oversite and investment negligence.

Anonymous said...

Meanwhile, the two big recruiters from BD go about their business as usual, dining at Walkers, sending their kids abroad, likely commenting on this site, while maintaining millions in bankruptcy proof accounts until they are 63 1/2. Where are you Mr. Fulcher? Why does their trial date keep getting postponed?

Anonymous said...

3:32, what do you consider business as usual? Where are they working (no longer at BD). Also, what kind of accounts are bankruptcy proof? Genuinely interested in both.

Anonymous said...

You know what. You get a college degree, then another degree ( MBA, or Ole Miss law degree) and apparently you are immune to prosecution. I am tired of this Sh*t.

Big Whoop! said...

Is Kingfish suggesting 500,000 is a lot of money?

Anonymous said...

Attn MegaRich 7:18 PM, $500,000.00 is a lot of money to a lot of people.You obviously are still in undergraduate school at OLE MISS. You hopefully will grow up after the ceremonious diploma walk. At that point, you can begin to learn what you failed to learn at Ole Miss. By the way, why is the endowment fund hemorrhaging money.

Anonymous said...

Stacey Wall sold his interest in Pinnacle Trust about the time of this settlement. Martin Palomo is the current owner/CEO, of what is now a SEC registered investment advisor, Pinnacle Wealth. They have approximately $405 million in assets in customer and corporate accounts.

It will be interesting to see how they fare under new ownership and under the SEC.


Anonymous said...

Mr. Wall and Mr. Adams were close friends. This is no surprise.

Anonymous said...

So where is Stacey Wall now?

Anonymous said...

Someone say Martin Palomo? People trust that guy with their money? I remember when he was just a wee little lad in the banking world, but he was a smooth talker.

Anonymous said...

How many times did this Walls guy try to pass the various security exams?

Anonymous said...

Walls appears to have used all of his equity in this company to bail himself out of future legal issues. At least I hope that is what he did. Also, the fact he set that company up purposely avoiding oversight from FINRA leads one to be at least a little leery.

Anonymous said...


Walls and Adams were buds at ccj. Same type. Loud talking, arrogant know it alls. Wall's outfit had several similar types. Was the Zito guy with them or another, similar outfit?

Anonymous said...

They better hope they are holding on tight to their clients. Every RIA and Financial company in the country is about to descend down upon their clients with this news.


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