JACKSON, Miss. (Legal Newsline) – Several law firms have been named as defendants in a lawsuit related to a Ponzi scheme.
Alysson Mills, the receiver for Arthur Lamar Adams and the Madison Timber Co. LLC, filed a suit against Butler Snow LLP and others in U.S. District Court for the Southern District of Mississippi, Northern Division on Dec. 19.
In the 45-page complaint, Mills alleges that the Madison Timber Co. would not have been successful at defrauding investors without the defendants' help. The suit states Adams, Madison Timber Co. and Madison Timber Properties operated a Ponzi scheme and defrauded hundreds of investors.
Other defendants are law firms Baker Donelson and Bearman, Caldwell & Berkowitz.
“Defendants lent their influence, their professional expertise, and even their clients to Adams," the suit states. “They made a fraudulent enterprise a fraternity.”
The plaintiff alleges that defendants committed civil conspiracy, aiding and abetting, recklessness, and minimum and gross negligence.
Mills alleges the defendants should have been aware of certain “red flags” that would indicate that Adams was running a Ponzi scheme. For instance, Adams allegedly had fake agreements for timber cutting and had no contracts with any lumber mills for processing the wood. He allegedly also offered outrageous claims of profits of 300 to 400 percent of the initial investment.
"This should have been a glaring warning sign alone,” the complaint states.
Mills, as the court-appointed receiver for the estates, has the power to investigate and "bring such legal actions based on law or equity in any state, federal, or foreign court as the receiver deems necessary or appropriate in discharging her duties as receiver," the suit states.
The plaintiff seeks damages in her favor, attorneys' fees, costs, interest and any other relief the court deems just and equitable. She is represented by Brown Bass & Jeter PLLC in Jackson, Mississippi, and Fishman Haygood LLP in New Orleans.