Ellington

JACKSON, Miss. (AP) — Two men were indicted this week by a federal grand jury in Mississippi, accused of taking part in an $85 million Ponzi scheme involving a fictitious lumber company, a prosecutor says.

Ted Brent Alexander, 55, and Jon Darrell Seawright, 49, both of Jackson, are each 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, according to Darren J. LaMarca, Acting U.S. Attorney for the Southern District of Mississippi.

Alexander, a prominent lobbyist, and Seawright, a lawyer, are accused of promising “guaranteed” returns to investors in a sophisticated scam involving nonexistent timber deals, according to the statement released Thursday.

A lawyer for Seawright did not respond to a request for comment Friday from The Associated Press.

Jonathan Matthew Eichelberger, the lawyer representing Alexander, said: “We have complete faith in the criminal justice system, and trust that the judge and jury will get this right."

The indictment alleges that from January 2011 through December 2018, Alexander and Seawright misled their investors to believe they were the principal actors in a "broker” enterprise purchasing timber on private land that was then resold to lumber mills for profit. Investors were promised repayment in 12 to 15 months at a rate of 12 percent to 15 percent annual interest, the indictment said.

All the while, the two men were “downplaying and concealing” the fact that there were no real contracts for timber and lumber mills and the “broker” was Madison Timber Properties, LLC, a company wholly owned by Arthur Lamar Adams, according to LaMarca.

Adams was sentenced in 2018 to 19½ years in federal prison on wire fraud charges.

The indictment alleges that, during the course of the scheme, Alexander and Seawright solicited more than $20 million from more than 50 investors.

The two men allegedly told people who agreed to loan money that they would inspect each site where timber was purchased and verify that the lumber mill agreements were valid, something they never did, according to the indictment.

It adds they also allegedly told those who loaned money that they had their own personal money invested in the operation and that investors would be repaid their money and interest before Alexander and Seawright received fees. In reality, the indictment alleges, the men received a percentage of investors' funds and were paid for recruiting new investors into the scheme.

Alexander's and Seawright's case is currently scheduled for trial starting July 6 in U.S. District Court in Jackson.

Seawright also was indicted by a federal grand jury this week on a fraud charge related to a filing in bankruptcy court. Seawright is charged with one count of bankruptcy filing in furtherance of a fraud.

That case is currently scheduled for trial June 28 in the U.S. District Court in Jackson.