Former Biglaw Partner Pleads Guilty For His Role In Ponzi Scheme

// Blocks on Blue Background symbolizing Business GrowthPeople may jokingly refer to Biglaw bills as highway robbery, but less common is the case of actual Biglaw robbery (or fraud, as the case may be). But that’s the story here.

Last week, former Baker Donelson partner Jon Seawright pleaded guilty to conspiracy to defraud investors for his role in a timber Ponzi scheme. He’s set to be sentenced on November 16, and faces up to five years in prison, three years of supervised release, and a fine of $250,000.

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According to a Department of Justice press release announcing the deal, over the course of seven years, Seawright and a partner secured millions of dollars of investments in timber intended for resale to a lumber mill. However, the lumber mill wasn’t real and the timber deeds were invalid:

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Seawright admitted that between 2011 and 2018, he and a co-conspirator participated in a scheme to defraud investors by soliciting millions of dollars under false pretenses and failing to use investor funds as promised. Seawright and his co-conspirator represented to investors that they were in the business of loaning funds to a “timber broker” to buy timber rights from landowners and then to sell the timber rights to lumber mills at a higher price. Seawright and his co-conspirator promised investors a return of 10% or more over twelve or thirteen months on each unit of invested capital. Seawright and his co-conspirator represented to their investors, and led their investors to believe, that Seawright and his co-conspirator were inspecting each tract of land and were vetting each document, deed, and contract in support of their investments. These promises and representations were material in that they were intended to cause investors to believe that their investments were secured by valid assets and to believe that the financial incentives and interests of Seawright and his co-conspirator aligned with those of the investors. In fact, Seawright and his co-conspirator failed to inspect each property related to the timber rights underlying each investment, and they failed to verify each executed lumber mill agreement related to each investment. Seawright and his co-conspirator made few or no such inquiries, and if Seawright and his co-conspirator had made such inquiries, they would have discovered that the timber deeds, lumber mill agreements, and related documents were not valid.

Seawright and Brent Alexander, a former senior public policy advisor and a nonlawyer lobbyist at Baker Donelson, operated an investment company, Alexander Seawright LLC — which the firm stresses was separate from their work at the law firm. That company’s ties to Arthur Lamar Adams and his company Madison Timber Properties LLC formed the basis of the government’s investigation.

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Alexander faces charges of 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. His trial is scheduled for August 15.

In 2018, Adams was sentenced to 19 1/2 years in prison for spearheading the Ponzi scheme.

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Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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Arthur Lamar Adama, Baker Donelson, Biglaw, Brent Alexander, Jon Seawright


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Originally posted on: https://abovethelaw.com/2022/07/former-biglaw-partner-pleads-guilty-for-his-role-in-ponzi-scheme/