JACKSON, Miss. - The president of a Mississippi lumber company and architect of a massive Ponzi scheme has pleaded guilty after his scheme affected hundreds of victims across 14 different states.
Arthur Lamar Adams, 58, president of Madison Timber Properties, bilked over $100 million and victimized at least 300 people, including U.S. Mississippi Senator Roger Wicker, say prosecutors.
Prosecutors allege that Adams, in as early as 2004, lied to investors by telling them that their money would be used by his company, Madison Timber Properties, to secure harvest timber rights from various landowners in Alabama, Florida, and Mississippi. Adams claimed he would cut lumber cheaply and sell it for higher prices to sawmills. He promised annual returns of 12-15 percent.
But Madison Timber never obtained any harvesting rights. Instead, Adams allegedly forged deeds and cutting agreements as well as documents reflecting the value of the timber on the land. Adams allegedly paid early investors with later investors' funds and convinced investors to roll over their investments - keeping the investments going in a classic Ponzi scheme. Prosecutors say Adams used investors' money for personal expenses and to develop an unrelated real estate project.
Adams created false documents, say prosecutors, which led investors to believe that their investments were secured by sufficient collateral in the event of the loans defaulting. Specifically, Adams created false timber deeds, which were made to look like contracts conveying timber rights from landowners to Madison Timber Properties. He forged the signatures of landowners and had the documents notarized to make the investments appear legitimate.
Adams faces up to 20 years in federal prison and a fine of $250,000. Prosecutors want Adams to forfeit his gains and make restitution. He remains confined at home. Sentencing is set for August 21.
Have something to say? Share your thoughts with us in the comments below.