Jackson Man Pleads Guilty to Multi-State Fraud Scheme Involving Over One Hundred Million Dollars and Hundreds of Victims

Jackson, Miss. – Arthur Lamar Adams, 58, of Jackson, pled guilty today before U.S. District Judge Carlton Reeves to one count of wire fraud for his role in a large, multi-state Ponzi scheme involving more than one hundred million dollars and hundreds of victims spanning a number of years, announced U.S. Attorney Mike Hurst and FBI Special Agent in Charge Christopher Freeze.

Restitution is mandatory under federal law, and Adams has agreed to forfeiture of all funds and assets related to the Ponzi scheme.

"Those who prey upon and swindle people out of their hard-earned money, in some cases their life savings and retirements, will be firmly prosecuted by this office and face justice in our courts. This criminal conduct will not be tolerated in our state, and if others were involved, we will continue to dig until all those responsible have been brought to justice," said U.S. Attorney Hurst. "Victims may contact the U.S. Attorney’s Office, and you can rest assured that we will do everything within our power to ensure victims are assisted, protected and afforded their rights."

Over a period of at least 7 years, Adams executed this sophisticated Ponzi scheme using Madison Timber Properties, LLC, a company wholly owned by Adams. From as early as 2011 through April, 2018, Adams’s scheme defrauded investors by soliciting millions of dollars of funds under false pretenses, failing to use the investors’ funds as promised, and converting investors’ funds to Adams’s own benefit without the knowledge of the investors. Instead of investing his clients’ money, Adams used the invested funds for his own personal benefit and for purposes other than those represented to investors, which also included making payments due and owing to other investors, thus perpetuating the Ponzi scheme. During the fraudulent scheme, Adams fraudulently obtained well in excess of one hundred million dollars from more than 250 investors located in at least 14 different states.

As part of his fraudulent scheme, Adams falsely represented to investors that Madison Timber Properties was in the business of buying timber rights from landowners and then selling the timber rights to lumber mills at a higher price. The object of the scheme was to cause individuals to invest in loans that purportedly were for the purpose of financing contracts for the purchase of timber rights to be sold to lumber mills at a higher price. However, neither Adams nor Madison Timber Properties had such timber rights or contracts with lumber mills, except in only a few instances.

Adams entered into fraudulent investment contracts with investors, most often in the form of promissory notes on behalf of Madison Timber Properties. The loans typically

guaranteed investors an interest rate of 12-13%, with the interest to be repaid to investors over the course of 12-13 months. The monthly payments due on these promissory notes were typically due on either the first or the fifteenth of the month.

Adams created false documents causing investors to believe that their investments were secured by sufficient collateral from which they could recover all or part of their investment in the event that Madison Timber Properties defaulted on the loans. Specifically, Adams created false timber deeds purporting to be contracts conveying timber rights from landowners to Madison Timber Properties. Adams forged the signatures of landowners and also created false timber deeds purporting to convey timber rights from Madison Timber Properties to the investors.

Adams will be sentenced by Judge Reeves on August 21, 2018, at 9:30 a.m., and faces a maximum penalty of 20 years in federal prison and a $250,000 fine.

The case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Dave Fulcher.