SEC Shuts Down $85 Million Ponzi Schemes; Investors Were Falsely Informed Land Was Being Purchased in Florida
On May 1st, the Securities and Exchange Commission (SEC) announced that it had recently shut down an $85 million Ponzi scheme that had ties to the state of Florida. In a legal complaint that was unsealed in the United States District Court for the Southern District of Mississippi, the SEC alleges that Arthur Lamar Adams misled at least 150 investors through his company Madison Timber Properties, LLC. Most of the investors victimized by this scheme were located in the southeastern United States.
Investors Were Promised Above Market Returns
Arthur Lamar Adams was the sole owner of Madison Timber Properties, LLC (MT Properties). Beginning in 2004, Mr. Adams started soliciting money from investors through this company. According to marketing information provided to investors, MT Properties had a relatively straightforward business model: The company would use investor money to purchase harvesting rights to land in the southern United States, specifically Mississippi, Alabama, and Florida. Then, the company would harvest the land and sell the timber at a significant profit. Through this operation, MT Properties stated that it would be able to provide investors with annual returns that were 12 and 15 percent. On paper, investors were informed that their money was making those types of returns.
Investor Money Was Not Used for the Stated Purpose
In reality, Mr. Adams was not using investor money to purchase land for harvesting. In fact, the SEC alleges that MT Properties never obtained the harvesting rights to any land, in any U.S. state. Instead, the agency contends that Mr. Adams provided investors with a number different forged documents and records. For example, investors were shown forged land deeds and fake harvesting agreements. In addition, Mr. Adams was promising the harvesting profits for land to which his company did not even have the rights. The same forged documents were shown over and over again to different investors.
MT Properties Operated as a Ponzi Scheme
The SEC states that MT Properties was simply shuffling investor money around. New investor money was being used to pay off the original investors. Meanwhile, Mr. Adams was siphoning off a large percentage of investor funds for his own personal use and to fund his side real estate development projects. The investigation into this case is ongoing. As of April 20th, the U.S. District Court granted the agency request for a full freeze on the assets of MT Properties and Arthur Lamar Adams.
Contact Our Miami Ponzi Scheme Attorneys Today
At Carlson & Associates, P.A, our law firm is committed to protecting the rights and interests of investors. If you or one of your loved ones lost money in a Ponzi scheme, we are here to help. To arrange a fully confidential, please call us now at 1-(305)-372-9700. From our office in the heart of Miami, we serve investors throughout South Florida, including in West Palm Beach, Fort Lauderdale, Hialeah, Coral Gables, Hollywood, and Pembroke Pines.
Resources:
sec.gov/news/press-release/2018-77
sec.gov/litigation/complaints/2018/comp-pr2018-77.pdf