Mississippi men indicted for alleged roles in lumber Ponzi scheme
Published 9:47 pm Thursday, May 20, 2021
Two Jackson men have been indicted by a federal grand jury for their role in a large, multi-million dollar Ponzi scheme that adversely affected hundreds of victims across multiple states over a number of years, announced Acting U.S. Attorney Darren J. LaMarca and FBI Special Agent in Charge Michelle Sutphin.
Ted Brent Alexander, 55, and Jon Darrell Seawright, 49, both of Jackson, appeared before U.S. Magistrate Judge LaKeysha G. Isaac today for their initial appearance and arraignment on the indictment. The case is currently scheduled to go to trial on July 6, 2021, before United States District Judge Carlton W. Reeves in Jackson.
Both Alexander and Seawright are charged with one count of conspiracy to commit securities fraud and wire fraud; one count of securities fraud; and four counts of wire fraud involving a scheme to defraud investors, all in connection with a Ponzi scheme promising guaranteed returns to investors who thought they were lending money to a ‘broker” enterprise purchasing timber that was then marketed to multiple lumber mills.
According to the indictment, from January 2011 through December 2018, Alexander and Seawright misled their investors to believe that Alexander and Seawright were the principal actors in the venture, while downplaying and concealing from investors the true fact that the “broker” was Madison Timber Properties, LLC, a company wholly owned by Arthur Lamar Adams, and there were no real contracts for timber and lumber mills. Adams was previously convicted and sentenced for his role in the Ponzi scheme.
In addition, the indictment alleges that Alexander and Seawright represented to their investors that the two men would inspect each property underlying each investment, and they would verify that supposed lumber mill agreements were in existence and valid. Alexander and Seawright failed to do any of those things. Throughout the fraud scheme, Alexander and Seawright persuaded their investors to maintain their investments and to invest additional funds, by asserting that Alexander and Seawright had their own personal funds invested in the venture.
Alexander and Seawright represented to their investors that the investors would be first repaid all of their principal and interest before Alexander and Seawright would receive fees, and therefore Alexander and Seawright would only earn money from each investment if they performed as promised to their investors. In fact, in addition to receiving a percentage of return on the investors’ funds, Alexander and Seawright also received payments from the broker for recruiting investors into the scheme. Alexander and Seawright did not disclose to the investors (a) that they were receiving those payments, or (b) the amount of the payments, or (c) that Alexander and Seawright were getting paid before any payment was made to the investors.
The indictment alleges that, during the course of their scheme and artifice to defraud, Alexander and Seawright solicited over twenty million dollars ($20,000,000) from more than fifty (50) investors.
Following the 2018 criminal prosecution of Arthur Lamar Adams, the United States District Court appointed a receiver, who is actively seeking to recover and maximize assets for restitution to investor victims. Information regarding the Receiver’s activities can be found at the receiver’s website, madisontimberreceiver.com. Although we cannot provide further details at this time, please be assured that all those involved are working diligently to investigate this matter and to locate and preserve assets that can be used for restitution to defrauded investors.
The case is being investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. The criminal case is being prosecuted by Assistant United States Attorney Theodore Cooperstein.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.