United States Attorney D. Michael Hurst, Jr.

Southern District of Mississippi

FOR IMMEDIATE RELEASE CONTACT: SHEILA WILBANKS
WEDNESDAY, MAY 9, 2018 PHONE: (601) 965-4480
https://www.justice.gov/usao-sdms

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.

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