SEC File 5

Case 3:18-cv-00252-CWR-FKB Document 179 Filed 08/23/19 Page 1 of 18
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES AND EXCHANGE No: 3:18-cv-252

COMMISSION,
Carlton W. Reeves, District Judge
Plaintiffs,
v.
ARTHUR LAMAR ADAMS AND

MADISON TIMBER PROPERTIES, LLC,
Defendants.
RECEIVER’S REPORT
August 23, 2019
/s/ Alysson Mills

Alysson Mills, Miss. Bar No. 102861
Fishman Haygood, LLP
201 St. Charles Avenue, Suite 4600
New Orleans, Louisiana 70170
Telephone: 504-586-5253
Fax: 504-586-5250
amills@fishmanhaygood.com
Receiver for Arthur Lamar Adams and
Madison Timber Properties, LLC
Introduction
For many years Arthur Lamar Adams, through his companies Madison Timber Company,
Inc. and Madison Timber Properties, LLC, operated a Ponzi scheme that defrauded hundreds of
investors. On May 9, 2018, Adams pleaded guilty to the federal crime of wire fraud. On October
30, 2018, he was sentenced to 19.5 years in prison.
On June 22, 2018, the Court appointed me Receiver of the estates of Adams and Madison
Timber. The order of appointment sets forth my responsibilities and duties. Among other things,
the order instructs me to take any action necessary and appropriate to preserve the assets of Adams
and his businesses, to maximize funds available for distributions to victims. I have undertaken
these tasks with substantial assistance from my counsel, including principally Brent Barriere and
Lilli Bass.
The Court instructed me to file a report of my progress every 60 days. I filed my last report
on June 17, 2019, and this report picks up where that report left off. It does not repeat the same
information, except as necessary for context. It contains the following parts:
page
Recent filings or events—criminal 3
Recent filings or events—civil 3
Receiver’s actions in the past 60 days 9
Receiver’s plan for the next 60 days 13
Summary of status of assets 15
As always, my reports are for the Court’s benefit, but I write them for a broader audience,
knowing that they may be read by non-lawyers including victims. I remain sensitive to potential
ongoing criminal investigations and do not disclose information that might impair their progress.
2
Recent filings or events—criminal
United States v. Adams, No. 3:18-cr-88
None.
United States v. McHenry, No. 3:19-cr-20
The U.S. Attorney’s Office for the Southern District of Mississippi charged Bill McHenry
with securities and commodities fraud and wire fraud earlier this year. The Court set a trial date
of September 3, 2019.1
Recent filings or events—civil
Securities & Exchange Commission v. Adams, et al., No. 3:18-cv-252
Settlement—Century Club Charities: On July 19, 2019, the Court approved a settlement
agreement2 whereby Century Club Charities agreed to return to the Receivership Estate $56,944,
reflecting the amount of contributions it received from Adams and Wayne Kelly, minus the value
of tangible benefits received by Adams and Kelly for those contributions. The settlement
agreement is available at madisontimberreceiver.com.
Sale—interest in Mallard Park, LLC: On August 16, 2019, the Court approved a purchase
agreement3 whereby the Receivership Estate sold its 25% interest in Mallard Park, LLC for
$175,000. The purchase agreement is available at madisontimberreceiver.com.
Settlement—Berachah Church and R.B. Thieme, Jr. Bible Ministries: On August 16, 2019,
the Court approved a settlement agreement4 whereby Berachah Church and R.B. Thieme, Jr. Bible
Ministries agreed to return to the Receivership Estate $280,530.50, reflecting 100% of the
contributions they received from Adams and 95% of the contributions they received from Wayne
Kelly. The settlement agreement is available at madisontimberreceiver.com.
1
Doc. 24, United States v. McHenry, No. 3:19-cr-20 (S.D. Miss.).
2
Doc. 162, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-252 (S.D. Miss.).
3
4
3
Settlement—Operation Grace World Ministries: On August 16, 2019, the Court approved
a settlement agreement5 whereby Operations Grace World Ministries agreed to return to the
Receivership Estate $39,325, reflecting 100% of the contributions it received from Adams and
95% of the contributions it received from Wayne Kelly. The settlement agreement is available at
madisontimberreceiver.com.
Proposed settlement—First National Bank of Clarksdale: On August 20, 2019, I submitted

to the Court a proposed settlement with First National Bank of Clarksdale (“FNBC”). In exchange
for the Receivership Estate’s release of claims, FNBC agrees to make a cash payment of
$4,000,000 to the Receivership Estate. FNBC also agrees to give the Receivership Estate a 60-day
“tender period” within which it may satisfy Oxford Springs’s debt to FNBC, currently $4,552,113,
by making a lump sum payment of $4,000,000 to FNBC.
The proposed settlement’s value to the Receivership Estate far exceeds $4,000,000, as it
will result in the Receivership Estate’s owning a 100% interest in Oxford Springs and retaining all
the proceeds from the future sale of Oxford Springs’s property. This is also the first proposed
settlement with a party who was not a recruiter for Madison Timber. I appreciate FNBC’s
cooperation in reaching a resolution that results in a substantial benefit to the Receivership Estate.
The proposed order approving settlement includes a channeling injunction, sometimes

called a “bar order,” which would bar any person from separately asserting claims against FNBC
arising out of FNBC’s banking relationship with Adams or Madison Timber and any role that
FNBC may be alleged to have had in the Madison Timber Ponzi scheme. Those claims instead
would be “channeled” through the Receivership Estate.
I am mindful that victims of the Madison Timber Ponzi scheme, as the ultimate
beneficiaries of the Receivership Estate, have a substantial interest in the Receivership Estate’s
claims against FNBC and their proposed resolution. I have asked the Court to set a hearing at
which interested parties will be given the opportunity to comment on the settlement before it is
approved. The proposed settlement agreement with FNBC and related filings are available at
5
4
Proposed settlement—Patrick Sands: On August 23, 2019, I submitted to the Court a

proposed settlement6 whereby Patrick Sands agrees to convey to the Receivership Estate his 47.5%
interest in Oxford Springs, LLC and separately release the Receivership Estate of any claim by
him to amounts due under his outstanding Madison Timber promissory notes in exchange for the
Receiver’s obtaining from FNBC a release of his guarantees of FNBC’s loans to Oxford Springs,
LLC. Together the proposed settlements with FNBC and Sands will result in the Receivership
Estate’s owning a 100% interest in Oxford Springs and retaining all the proceeds from the future
sale of Oxford Springs’s property. The proposed settlement agreement is available at
Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679
The complaint against Mike Billings, Wayne Kelly, and Bill McHenry, filed October 1,
2018, alleged they received millions of dollars in “commissions” in exchange for their recruitment
of new investors to Madison Timber. Wayne Kelly already settled with the Receivership Estate.
Mike Billings: On August 16, 2019, the Court approved a settlement agreement with Mike
Billings7 whereby he shall transfer the following assets currently in his possession to the
Receivership Estate:
 $325,000 in cash currently sitting bank accounts and
 his 5% interest in Oxford Springs.
In addition, Billings shall, among other things:
 execute a promissory note in the original principal amount of $500,000 due and
payable in four years that may be prepaid in the amount of $187,500 if paid in 365
days, $250,000 if paid in 547 days, or $312,500 if paid in 730 days;
 restate his federal and state income tax returns for the years in question, as permitted
by law, and transfer 90% of any refunds received to the Receivership Estate; and
 cooperate with ongoing efforts to recover money for the Receivership Estate.
6
7
Doc. 61, Alysson Mills vs. Michael D. Billings, et al., No. 3:18-cv-00679 (S.D. Miss).
5
Unlike the Receivership Estate’s settlement with Wayne Kelly, the settlement with Billings
does not include what is known as a “bar order” which would bar any person from asserting claims
against Billings arising out of his role in the Madison Timber Ponzi scheme. The settlement
agreement is available at madisontimberreceiver.com.
Bill McHenry: On August 16, 2019, the Court granted my motion for summary judgment
against Bill McHenry and entered final judgment against him in the amount of $3,473,320,
reflecting the “commissions” he received from Madison Timber.8 The order is available is
Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866
The complaint against Butler Snow LLP; Butler Snow Advisory Services, LLC; Matt
Thornton; Baker, Donelson, Bearman, Caldwell & Berkowitz, PC; Alexander Seawright, LLC;
Brent Alexander; and Jon Seawright, filed December 19, 2018, alleges the law firms and their
agents lent their influence, their professional expertise, and even their clients to Adams and
Madison Timber. None of the defendants has settled with the Receivership Estate.
Butler Snow: The Butler Snow defendants have argued that the case against them should
be submitted to private arbitration. I have argued, among other things, that private arbitration is in
no one’s interest, except Butler Snow’s. The Butler Snow defendants’ motion and related filings
are available at madisontimberreceiver.com. As of this filing the Court had not issued a ruling.
Baker Donelson: Baker Donelson filed a motion to dismiss all claims against it, which I
opposed. Baker Donelson’s motion and related filings are available at madisontimberreceiver.com.
As of this filing the Court had not issued a ruling.
Alexander Seawright: The Alexander Seawright defendants filed a motion to dismiss all
claims against them, which I opposed. The Alexander Seawright defendants’ motion and related
filings are available at madisontimberreceiver.com. As of this filing the Court had not issued a
ruling.
8
Doc. 62, Alysson Mills vs. Michael D. Billings, et al., No. 3:18-cv-00679 (S.D. Miss).
6
Alysson Mills v. BankPlus, et al., No. 3:19-cv-196
The complaint against BankPlus; BankPlus Wealth Management, LLC; Gee Gee Patridge,
Vice President and Chief Operations Officer of BankPlus; Stewart Patridge; Jason Cowgill; Martin
Murphree; Mutual of Omaha Insurance Company; and Mutual of Omaha Investor Services, Inc.,
filed March 20, 2019, alleges the financial institutions and their agents lent their influence, their
professional services, and even their customers to Madison Timber, establishing for it a de facto
DeSoto County headquarters within BankPlus’s Southaven, Mississippi branch office. None of the
defendants has settled with the Receivership Estate.
BankPlus: BankPlus filed a motion to dismiss all claims against it, which I opposed.
BankPlus’s motion and related filings are available at madisontimberreceiver.com. As of this filing
the Court had not issued a ruling.
Gee Gee Patridge: Gee Gee Patridge, Vice President and Chief Operations Officer of
BankPlus, filed a motion to dismiss all claims against it, which I opposed. Gee Gee Patridge’s
motion and related filings are available at madisontimberreceiver.com. As of this filing the Court
had not issued a ruling.
Martin Murphree: Murphree, a former agent of BankPlus and Mutual of Omaha, filed an
answer to the complaint on May 22, 2019. The answer is available at madisontimberreceiver.com.
Jason Cowgill: Cowgill, a former manager of BankPlus’s Southaven, Mississippi branch,

filed a motion to dismiss all claims against him, which I opposed. Cowgill’s motion and related
filings are available at madisontimberreceiver.com.
Mutual of Omaha: Mutual of Omaha filed a motion to dismiss all claims against it, which
I opposed. Mutual of Omaha’s motion and related filings are available at madisontimber
receiver.com.
Stewart Patridge: Stewart Patridge, a former agent of BankPlus and Mutual of Omaha,
filed an answer to the complaint on July 1, 2019. The answer is available at
7
Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364
The complaint against The UPS Store, Inc.; Herring Ventures, LLC d/b/a The UPS Store;
Austin Elsen; Tammie Elsen; Courtney Herring; Diane Lofton; Chandler Westover; Rawlings &
MacInnis, PA; Tammy Vinson; and Jeannie Chisholm, filed May 23, 2019 and amended June 13,
2019, alleges the defendants are the notaries and their employers on whom Lamar Adams
principally relied to notarize fake timber deeds. None of the defendants has settled with the
Receivership Estate.
Rawlings & MacInnis: Rawlings & MacInnis, PA; Tammy Vinson; and Jeannie Chisholm
filed a motion to dismiss all claims against it on August 8, 2019. That motion and related filings
are available at madisontimberreceiver.com.
The UPS Store Madison: I expect Herring Ventures, LLC d/b/a The UPS Store; Austin
Elsen; Tammie Elsen; Courtney Herring; Diane Lofton to file a motion to dismiss or other
responsive pleading on or before August 25, 2019.
UPS: I expect The UPS Store, Inc. to file a motion to dismiss or other responsive pleading
on or before August 29, 2019.
I will respond to all defendants’ motions to dismiss or other responsive pleadings on or

before September 12, 2019.
Securities & Exchange Commission v. Kelly, et al., No. 3:19-cv-585
On August 20, 2019, the Securities and Exchange Commission filed a civil complaint
charging Wayne Kelly with the sale of unregistered securities, fraud in the purchase or sale of
securities, fraud in the offer or sale of securities, and the sale of securities while unregistered. The
complaint alleges Kelly provided false information to investors by telling them that their money
would be used by Madison Timber to secure and harvest timber.
On August 21, 2019, the Securities and Exchange Commission announced a settlement
with Kelly whereby he consents to the entry of a judgment:
 permanently restraining and enjoining him from further violations of federal

securities laws;
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 disgorging his ill-gotten gains, in an amount to be determined; and
 ordering that he pay civil penalties, in an amount to be determined.
The Securities and Exchange Commission’s filings and press release are available at
Receiver’s actions in the past 60 days
Since I filed my last report on June 17, 2019, I have:
Continued to litigate Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679
As summarized above, I finalized settlement with Mike Billings, and the Court granted my
motion for summary judgment against Bill McHenry.
Continued to litigate Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866
As summarized above, I previously filed oppositions to the Butler Snow defendants’

motion to compel arbitration and Baker Donelson’s and the Alexander Seawright defendants’
motions to dismiss. As of this filing the Court had not issued a ruling on those motions.
Continued to litigate Alysson Mills v. BankPlus, et al., No. 3:19-cv-196
As summarized above, I previously filed oppositions to the motions to dismiss filed by

BankPlus; Gee Gee Patridge, Vice President and Chief Operations Officer of BankPlus; Jason
Cowgill; and Mutual of Omaha. As of this filing the Court had not issued a ruling on those
motions.
Filed Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364
As summarized above, I previously filed a complaint and an amended complaint against

The UPS Store, Inc.; Herring Ventures, LLC d/b/a The UPS Store; Austin Elsen; Tammie Elsen;
Courtney Herring; Diane Lofton; Chandler Westover; Rawlings & MacInnis, PA; Tammy Vinson;
and Jeannie Chisholm. As of this filing the Rawlings & MacInnis defendants had filed a motion to
9
dismiss, and the remaining defendants are expected to file motions to dismiss or other responsive
pleadings by the end of the month.
Continued to account for “commissions” and gifts
I continue to account for “commissions” paid by Adams, Madison Timber, or Wayne Kelly
to individuals in exchange for their assistance in recruiting new investors to the Madison Timber
Ponzi scheme. I continue to account for gifts that Adams or Wayne Kelly made with proceeds
from Madison Timber.
Century Club Charities: As summarized above, Century Club Charities returned to the
Receivership Estate $56,944 that it received from Lamar Adams and Wayne Kelly.
Berachah Church and R.B. Thieme, Jr. Bible Ministries: As summarized above, Berachah
Church and R.B. Thieme, Jr. Bible Ministries returned to the Receivership Estate $280,530.50 that
they received from Lamar Adams and Wayne Kelly.
Operation Grace World Ministries: As summarized above, Operations Grace World

Ministries returned to the Receivership Estate $39,325 that it received from Lamar Adams and
Wayne Kelly.
Continued to review records
To date I have received and reviewed records from Wayne Kelly, Mike Billings, Alexander
Seawright, Brent Alexander, Jon Seawright, First Bank of Clarksdale, Southern Bancorp, River
Hills Bank, Community Bank, Jefferson Bank, Trustmark Bank, BankPlus, Southern AgCredit,
Adams’s and Madison Timber’s accounting firm, Butler Snow, Rawlings & MacInnis, Madison
Trust Company (no relation to Madison Timber), Pinnacle Trust, and The UPS Store. I continue
to request and review additional records as necessary to assess the Receivership Estate’s rights
against third parties that had professional relationships with Adams or Madison Timber.
10
Worked with LLCs of which Adams was a member
Adams was a member of at least six active limited liability companies (“LLCs”) that own
real estate. The Receivership Estate has already resolved its interests in 707, LLC; Delta Farm
Land Investments, LLC; and KAPA Breeze, LLC. The status of the remaining LLCs is as follows:
Mallard Park, LLC: As summarized above, I entered a purchase agreement whereby the
Receivership Estate sold its 25% interest in Mallard Park, LLC for $175,000. The Court approved
the purchase agreement on August 16, 2019.
MASH Farms, LLC: The LLC’s principal asset is 808+ acres with a hunting camp in
Sunflower County, Mississippi. I have obtained an appraisal of that property and have had
preliminary negotiations with the LLC’s other members regarding the purchase of the
Receivership Estate’s 25% interest. I will consider any offer by any party to purchase the
Receivership Estate’s interest for a price that I believe is fair, and I encourage interested parties to
contact me directly (504-586-5253). If I am unable to sell the Receivership Estate’s interest, I will
evaluate other options available to the Receivership Estate.
Oxford Springs, LLC: The LLC attempted, but failed, to sell its principal asset, 2,300+/-
acres of undeveloped land in Lafayette County, Mississippi, earlier this year.
As a result of the failed sale, my counsel and I reassessed the Receivership Estate’s options.
Oxford Springs’s property is valuable and can be sold for several millions of dollars, but no sale
will meaningfully benefit the Receivership Estate so long as it must first pay off its bank, FNBC,
and its other members. To maximize Oxford Springs’s value to the Receivership Estate, we
devised a plan to own 100% of Oxford Springs and to sell its property free and clear of its debts.
Consistent with that plan, we undertook negotiations with FNBC, Patrick Sands, and Mike
Billings.
As summarized above, we negotiated a proposed settlement with FNBC whereby it agrees

to make a cash payment of $4,000,000 to the Receivership Estate and to give the Receivership
Estate a 60-day “tender period” within which it may satisfy Oxford Springs’s debt to FNBC,
currently $4,552,113, by making a lump sum payment of $4,000,000 to FNBC. Separately, we
negotiated a proposed settlement with Sands whereby he agrees to convey to the Receivership
11
Estate his 47.5% interest in Oxford Springs in exchange for my obtaining from FNBC a release of
his guarantees of FNBC’s loans to Oxford Springs. I obtained from Billings his 5% interest in
Oxford Springs in a settlement that the Court approved on August 16, 2019.
If the Court grants the motions for approval of proposed settlements with FNBC and Sands,
the Receivership Estate will own 100% of Oxford Springs and can sell its property free and clear
of Oxford Springs’s debt to FNBC. The proceeds of a future sale will go entirely to the
Conferred with federal and state authorities
I have continued to confer with the U.S. Attorney’s Office for the Southern District of
Mississippi, the FBI, the Securities and Exchange Commission, the Mississippi Secretary of
State’s Office, and the Mississippi Department of Banking and Consumer Finance.
Communicated with investors in Madison Timber
I have continued to communicate with investors in Madison Timber via phone, letter,
email, and in-person meetings. I speak to investors almost daily.
Interviewed persons with knowledge
I have continued to interview individuals with first-hand knowledge of matters bearing on

the Receivership Estate.
Researched legal claims against third parties
My colleagues and I research legal claims against third parties as new facts are discovered.
I do not publish our assessments here because to do so would be to telegraph our legal strategies
to future defendants.
12
Receiver’s plan for the next 60 days
Continue to litigate Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679
I intend to collect from Mike Billings the amounts due under his settlement agreement and
collect from Bill McHenry the amounts due under this Court’s judgment against him.
Continue to litigate Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866
As noted above, I await the Court’s rulings on the Butler Snow defendants’ motion to
compel arbitration and Baker Donelson’s and the Alexander Seawright defendants’ motions to
dismiss.
Continue to litigate Alysson Mills v. BankPlus, et al., No. 3:19-cv-196
As noted above, I await the Court’s rulings on the motions to dismiss filed by BankPlus;
Gee Gee Patridge, Vice President and Chief Operations Officer of BankPlus; Jason Cowgill; and
Mutual of Omaha.
Continue to litigate Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364
As noted above, I expect to file oppositions to motions dismiss or other responsive

pleadings filed or to-be-filed by The UPS Store, Inc.; Herring Ventures, LLC d/b/a The UPS Store;
Austin Elsen; Tammie Elsen; Courtney Herring; Diane Lofton; Chandler Westover; Rawlings &
MacInnis, PA; Tammy Vinson; and Jeannie Chisholm.
Continue to account for “commissions” and gifts
As noted above, I continue to account for “commissions” paid by Lamar Adams, Madison
Timber, or Wayne Kelly to individuals in exchange for their assistance in recruiting new investors
to the Madison Timber Ponzi scheme. I continue to account for gifts that Lamar Adams or Wayne
Kelly made with proceeds from Madison Timber.
Monetize Adams’s interests in the remaining three LLCs
For the remaining two LLCs, I intend to liquidate the Receivership Estate’s interests to
maximize value to the Receivership Estate:
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Mash Farms, LLC: I want to sell the Receivership Estate’s 25% interest on terms that are
in the best interests of the Receivership Estate. I will continue to consider a sale to the LLC’s other
members but, as noted above, I will consider any offer by any party that I believe is fair, and I
encourage interested parties to contact me directly (504-586-5253). If I am unable to sell the
Receivership Estate’s interest, I will evaluate other options available to the Receivership Estate.
Oxford Springs, LLC: If the Court grants the motions for approval of proposed settlements
with FNBC and Patrick Sands, the Receivership Estate will own 100% of the LLC and I will sell
its property free and clear of the LLC’s debt to FNBC.
File additional lawsuits
I intend to file additional lawsuits against third parties that contributed to the debts of
Madison Timber, and therefore to the debts of the Receivership Estate, so long as new information
justifies it. To protect the Receivership Estate’s position, I am not disclosing publicly third-party
targets.
I intend to file additional lawsuits to recover commissions, fraudulent transfers, and gifts
as necessary to recover money that belongs to the Receivership Estate.
Continue communicating with investors
I intend to continue communicating with investors, through my website, email, phone, and
letters. Investors provide information that is useful to my investigation and, in turn, I hope that I
demystify the receivership process for them.
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Summary of status of assets
My end goal is to make an equitable distribution to victims with the money I recover.
Although I continue to recover money from various third parties, the money that I have recovered
to date would not go far. As I have advised, it may take a long time and a lot of work to recover
enough money to make a meaningful distribution, but I am committed to pursuing recoveries for
the benefit of victims so long as the Court allows. The Receivership Estate’s most valuable assets
are the lawsuits it has filed or intends to file.
The current status of the Receivership Estate’s assets is as follows:
Receivership Estate’s account at Hancock Bank current balance $5,965,531.08

Previous balance as of June 17, 2019 $5,127,603.24
Sale proceeds—134 Saint Andrews +$350,777.38
Sale—interest in Mallard Park, LLC +$175,000.00
Settlement—Century Club Charities +$56,944.00
Settlement—Berachah Church +$175,904.00
Settlement—R.B. Thieme, Jr. +$104,626.50
Settlement—Operation Grace World +$39,325.00
Interest +$13,366.66
Bank fees -$ 24.00
Receiver’s counsel’s fees/expenses -$90,991.70
Alysson Mills vs. Michael D. Billings, et al., No. 3:18-cv-679

Lawsuit to recover $16,000,000 in commissions
settlement with Billings:
$325,000 due now
plus 5% interest in
Oxford Springs, LLC;
promissory note in the original
principal amount of $500,000
outstanding
judgment against McHenry:

$3,473,320
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Alysson Mills vs. Butler Snow, et al., No. 3:18-cv-866

Lawsuit to hold law firms liable for debts of the Receivership litigation ongoing
Estate
Alysson Mills vs. BankPlus, et al., No. 3:19-cv-196

Lawsuit to hold bank and financial services company liable for litigation ongoing
debts of the Receivership Estate
Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364

Lawsuit to hold notaries liable for debts of the Receivership Estate litigation ongoing
Settlement—Wayne Kelly received $1,384,435.17

plus interests in 707, 315 Iona,
and KAPA Breeze, LLCs
promissory note in the original
principal amount of $400,000
outstanding
Settlement—Frank Zito received $100,000,

first installment
received $100,000, second
and final installment,
June 12, 2019
House at 134 Saint Andrews Drive, Jackson, Mississippi received $350,777.38

Unencumbered in proceeds from sale
Condo in Calton Hill subdivision in Oxford, Mississippi received $139,919.09

Unencumbered in proceeds from sale
Jewelry for sale
1/4 Mallard Park, LLC

1,723 acres with hunting lodge in Humphreys County received $175,000
Purchased in 2016 for $2,593,500 for sale of interest
Encumbered by Southern AgCredit mortgage
Owe approximately $2,000,000
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1/4 Mash Farms, LLC assessing options

808+ acres with hunting camp in Sunflower County
Purchased in 2014 for $1,600,000
Encumbered by Trustmark Bank mortgage
Owe approximately $900,000
47.5% Oxford Springs, LLC settlements with

2,300+/- acres undeveloped land in Lafayette County FNBC and Patrick Sands
Purchased in 2015 and 2016 for total of $6,158,000 pending
Encumbered by FNBC mortgage
Hartford Life and Annuity Insurance Co. life insurance policy surrendered for $167,206.60
Lincoln National Life Insurance Co. life insurance policy surrendered for $3,678.45
1/6 707, LLC LLC sold principal asset and

263+ acres recreational land in Holmes County dissolved; tendered $6,994.09
Purchased in 2009 representing Adams’s, Kelly’s, and
Encumbered by First Commercial Bank mortgage McHenry’s interests to
Owe approximately $368,000 the Receivership Estate
1/3 Delta Farm Land Investments, LLC LLC sold principal asset and
1170+ acres farmland in Oktibbeha County dissolved; tendered $323,440.88
Purchased in 2014 for $2,796,100 representing Adams’s interest to
Encumbered by Trustmark Bank mortgage the Receivership Estate
Settlement—Ole Miss Athletics Foundation received $155,084.50,

first installment
received $155,084.50,
second and final installment,
April 17, 2019
Marital Property Settlement—Vickie Lynn Adams received $58,247

Lump sum payment includes proceeds from sale of Lexus LX 570
and liquidation of Hartford Life and Annuity Insurance Co. life
insurance policy
Settlement—Adams children received $170,000
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1/2 KAPA Breeze LLC sold the Receivership Estate’s

1.5+/- acres mixed-use land on Highway 30A in Florida interest for $700,000
Purchased in 2017 for approximately $1,900,000
Encumbered by Jefferson Bank mortgage
Alexander Seawright—UPS’s funds* holding $100,000
Settlement—Philippi Freedom Ministries received $16,125
Settlement—Rick Hughes Evangelistic Ministries received $43,657.95
Settlement—Century Club Charities received $56,944
Settlement—Berachah Church received $175,904
Settlement—R.B. Thieme, Jr. received $104,626.50
Settlement—Operation Grace World Missions received $39,325
2018 King Ranch Ford F150 truck sold for $42,750
Strikethrough indicates asset has been liquidated or proceeds are already accounted for in the Hancock
Bank account balance.
*Holding funds solely as an offset to UPS’s monetary liability for future claims the Receivership Estate
might have against UPS.
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UNITED STATES DISTR ICT COURT

SOUTHERN DISTR ICT OF M ISS ISS IPPI
NORTHERN DIVISION
SECURITIES AND EXCHANGE Case No. 3:18-cv-252

COMMISSION
Plaintiff, Hon. Carlton W. Reeves, District Judge

Hon. F. Keith Ball, Magistrate Judge
v.

MADISON TIMBER PROPERTIES, LLC
Defendants.
MOTION FOR APPROVAL OF PRO POSED SETTLEMENT WITH FNBC
Alysson Mills, in her capacity as the court-appointed receiver (the “Receiver”) for Arthur
Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”), through
undersigned counsel, respectfully files this Motion for Approval of Proposed Settlement with
First Valley National Corp. and its wholly owned subsidiary First National Bank of Clarksdale
(“FNBC”) and states as follows:
1.
In exchange for the Receiver’s release of any claims against FNBC arising from FNBC’s
alleged role in the Madison Timber Ponzi scheme (which FNBC denies) and a channeling
injunction, FNBC agrees to make a cash payment of $4,000,000.00 to the Receiver and to
provide the Receiver with a 60 day “Tender Period” from the “Effective Date” of the Settlement
Agreement during which the Receiver may satisfy all outstanding loans by FNBC to Oxford
1
Springs, LLC (“Oxford Springs”), on which $4,552,113 is currently owed, by making a lump
sum payment of $4,000,000.00 to FNBC.
2.
The value of the proposed settlement to the Receivership Estate is far greater than the
$4,000,000.00 cash payment by FNBC and the 60 day “Tender Period” within which the
Receiver may satisfy all outstanding loans by FNBC to Oxford Springs, on which $4,552,113 is
currently owed, by making a $4,000,000.00 payment to FNBC, as it will result in the
Receivership Estate’s owning a 100% interest in Oxford Springs and retaining all of the proceeds
from the future sale of Oxford Springs’s property.
3.
The Receiver takes seriously her obligation to maximize the value of the Receivership
Estate’s claims against third parties, and if she does not finalize a settlement with FNBC on the
proposed terms, she will file a lawsuit to pursue the Receivership Estate’s claims. But the
Receiver believes the proposed settlement is preferable to a lawsuit under the circumstances.
Settlement now avoids the likelihood of drawn-out litigation and the risk of adverse rulings and
guarantees immediate benefit to the Receivership Estate.
4.
The Receiver is also mindful that the proposed settlement with FNBC is the first with a
party who was not a recruiter for Madison Timber. The Receivership Estate has many claims,
filed and to-be-filed, against third parties. The Receiver appreciates FNBC’s cooperation in
reaching an early resolution that results in a substantial benefit to the Receivership Estate.
2
5.
The proposed Settlement Agreement [Exhibit A] provides that FNBC’s cash payment of
$4,000,000.00 to the Receiver, together with the 60 day “Tender Period” in which the Receiver
will have the option to satisfy all outstanding loans from FNBC to Oxford Springs, on which
$4,552,113 is currently owed, will allow the Receivership Estate to satisfy all outstanding debt of
Oxford Springs and achieve 100% ownership of Oxford Springs. The accompanying
memorandum summarizes the Settlement Agreement’s terms.
6.
The proposed Order Approving Settlement [Exhibit B] includes a channeling injunction,
sometimes called a “bar order,” which would bar any person or non-regulatory entity1 from
separately asserting claims against FNBC arising out of, in connection with, or relating to
FNBC’s banking relationship with Adams and/or Madison Timber and any role that FNBC may
be alleged to have had in the Madison Timber Ponzi scheme (which FNBC denies). Those
claims instead would be “channeled” through the Receivership Estate.
7.
The Receiver is mindful that victims of the Madison Timber Ponzi scheme, as the
ultimate beneficiaries of the Receivership Estate, have a substantial interest in the Receivership
Estate’s claim against FNBC and the proposed resolution of it. The Receiver believes it
appropriate to allow interested parties an opportunity to be heard before the proposed settlement
is approved. The Receiver thus proposes notice and hearing as described in the accompanying
memorandum and set forth in the proposed Order Setting Hearing [Exhibit C] to give victims
1
To be clear, the U.S. Attorney’s Office, the F.B.I., the S.E.C., and the Mississippi Secretary of State,
among other law enforcement bodies, are not affected by the proposed settlement. The Receiver does not
purport to recommend any settlement that would interfere with their separate work.
3
and interested parties a full and fair opportunity to be heard. The Receiver believes the proposed
notice and hearing is efficient and desirable under the circumstances, given the particular
interests at stake.
______________________
WHEREFORE, for the reasons stated here and in the accompanying memorandum, the
Receiver respectfully requests that the Court enter the proposed Order Setting Hearing so that the
proposed settlement may be presented and, if the Court agrees after notice and hearing,
approved.
August 20, 2019

Respectfully submitted,
/s/ Lilli Evans Bass /s/ Brent B. Barriere

BROWN BASS & JETER, PLLC FISHMAN HAYGOOD, LLP
Lilli Evans Bass, Miss. Bar No. 102896 Admitted pro hac vice
LaToya T. Jeter, Miss. Bar No. 102213 Brent B. Barriere, Primary Counsel
1755 Lelia Drive, Suite 400 Jason W. Burge
Jackson, Mississippi 39216 Kristen D. Amond
Tel: 601-487-8448 Rebekka C. Veith
Fax: 601-510-9934 201 St. Charles Avenue, Suite 4600
bass@bbjlawyers.com New Orleans, Louisiana 70170
Receiver’s counsel Tel: 504-586-5253
Fax: 504-586-5250
bbarriere@fishmanhaygood.com
jburge@fishmanhaygood.com
kamond@fishmanhaygood.com
rveith@fishmanhaygood.com
Receiver’s counsel
4
CERTIFICATE OF SERVICE
I certify that I electronically filed the foregoing with the Clerk of Court using the ECF
system which sent notification of filing to all counsel of record.
In addition, I have separately emailed a copy of the foregoing to:
Cliston V. “Doc” Bodine, III

Gerrish Smith Tuck
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
dbodine@gerrish.com
Counsel for First Valley National Corp. and First National Bank of Clarksdale
Date: August 20, 2019 /s/ Brent B. Barriere

Admitted pro hac vice
5
Case 3:18-cv-00252-CWR-FKB Document 174-2 Filed 08/20/19 Page 1 of 12

NORTHERN DIVISION

COMMISSION

v.

Defendants.
PROPOSED ORDER APPROVING SETTLEMENT
EXHIBIT B
Before the Court is the Motion for Approval of Proposed Settlement with First Valley
National Corp. and its wholly owned subsidiary First National Bank of Clarksdale (“FNBC”)
filed by Alysson Mills, in her capacity as the court-appointed receiver (the “Receiver”) for
Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”).
The motion asks the Court to approve the Receiver’s proposed settlement with FNBC. In
exchange for the Receiver’s and Receivership Estate’s release of any claims against FNBC
arising from FNBC’s banking relationship with Adams and Madison Timber and any role that
FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which FNBC denies)
and a channeling injunction, FNBC agrees to make a cash payment of $4,000,000.00 to the
Receiver and provide the Receiver with a 60 day “Tender Period” from the “Effective Date” of
the Settlement Agreement within which the Receiver may satisfy all outstanding loans by FNBC
to Oxford Springs, LLC (“Oxford Springs”), on which $4,552,113 is currently owed, by making
a lump sum payment of $4,000,000.00 to FNBC.
After notice and hearing, and after having considered the filings and arguments of
counsel, the Court GRANTS the motion.
BACKGROUND
The Receiver’s duties
The Receiver has a duty “to take custody, control, and possession of all Receivership
Property, Receivership Records, and any assets traceable to assets owned by the Receivership
Estate” and 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.”1
1
Docket No. 33, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-252 (S.D. Miss).
EXHIBIT B
Oxford Springs
“Receivership Property” and “assets owned by the Receivership Estate” include
Adams’s, and now the Receivership Estate’s, interest in Oxford Springs.
Oxford Springs is a Delaware limited liability company formed in 2014. Its sole asset is
approximately 2,400 acres of undeveloped land in Lafayette County, Mississippi. It purchased
the property with the intent to develop an upscale neighborhood with an equestrian park and golf
course near Oxford, Mississippi. There has been no actual development on the property.
The Receivership Estate owns Adams’s 47.5% interest in Oxford Springs. Of the
remaining interests, Patrick Sands owns 47.5% and Mike Billings owns 5%.
FNBC
FNBC holds two deeds of trust over Oxford Springs’s property. Oxford Springs
purchased the property in two separate transactions and for each obtained a loan from FNBC:
Oxford Springs purchased the first approximately 2,300 acres (“Parcel 1”) on April 29,
2015 for $5,158,031.54. In connection with that purchase, it borrowed $4,224,812 from FNBC,
and FNBC obtained a deed of trust over the approximately 2,300 acres as well as personal
guarantees from Adams and Sands.
Oxford Springs purchased the additional approximately 100 acres (“Parcel 2”) on
September 23, 2016 for $1,000,000. In connection with that purchase, it borrowed $1,000,000
from FNBC, and FNBC obtained a deed of trust over the approximately 100 acres as well as
personal guarantees from Adams and Sands.
FNBC’s loans to Oxford Springs are cross-collateralized, and the current total balance is
$4,552,113.
EXHIBIT B
Attempted sale
Oxford Springs entered a contract to sell Parcels 1 and 2 earlier this year. That sale failed
after the buyer declined to purchase Parcel 2 and sought to adjust the purchase price accordingly.
Oxford Springs could have sold only Parcel 1 to the buyer, but after paying off FNBC’s loans
and other debts and dividing what remained among Oxford Springs’s members, the Receivership
Estate would have received little, if any, proceeds from the sale. The Receiver refused to sell
under those circumstances.
The failed sale caused the Receiver’s counsel to reassess the Receivership Estate’s
options. Oxford Springs’s property is valuable and can be sold for several millions of dollars, but
no sale will meaningfully benefit the Receivership Estate so long as it must first pay off FNBC
and Oxford Springs’s other members. To maximize Oxford Springs’s value to the Receivership
Estate, the Receiver’s counsel devised a plan to own 100% of Oxford Springs and to sell its
property free and clear of Oxford Springs’s debt to FNBC.
The Receiver’s negotiations—FNBC
Oxford Springs owes FNBC $4,552,113.
Separately, FNBC was one of Madison Timber’s multiple banks and is a likely defendant
in a lawsuit by the Receivership Estate. The Receiver presented FNBC with a draft complaint
asserting claims arising from FNBC’s banking relationship with Adams and Madison Timber
and any role that FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which
FNBC denies).
After thoughtful negotiation, FNBC agreed to make a cash payment of $4,000,000.00 to
the Receiver and provide the Receiver with a 60 day “Tender Period” from the “Effective Date”
of the Settlement Agreement within which the Receiver may satisfy all outstanding loans by
EXHIBIT B
FNBC to Oxford Springs, on which $4,552,113 is currently owed, by making a lump sum
payment of $4,000,000.00 to FNBC in exchange for the Receiver’s release of any claims against
FNBC arising from FNBC’s banking relationship with Adams and Madison Timber and any role
that FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which FNBC
denies) and a channeling injunction.
The Receiver’s negotiations—Sands
Sands owns a 47.5% interest in Oxford Springs and is a guarantor of FNBC’s two loans
to Oxford Springs.
Separately, Sands was a Madison Timber investor and is a likely claimant of the
Receivership Estate to the extent he still holds outstanding Madison Timber promissory notes.
Sands agreed to convey to the Receivership Estate his 47.5% interest in Oxford Springs
and also release the Receivership Estate of any claim by him to amounts due under his
outstanding Madison Timber promissory notes in exchange for the Receiver’s obtaining from
FNBC a release of his guarantees of FNBC’s loans to Oxford Springs. Simultaneously with the
filing of her motion to approve her proposed settlement with FNBC, the Receiver filed a motion
to approve the Receiver’s proposed settlement with Sands.
The Receiver’s negotiations—Billings
Billings owns a 5% interest in Oxford Springs.
Billings is a defendant in the lawsuit styled Alysson Mills v. Michael D. Billings, et al.,
No. 3:18-cv-679 (S.D. Miss.), in which the Receiver alleges he received millions of dollars in
“commissions” in exchange for his recruitment of new investors to Madison Timber. On July 9,
EXHIBIT B
2019, the Receiver filed a motion for approval of a proposed settlement with Billings.2 As part
of that proposed settlement, Billings agreed to convey to the Receivership Estate his 5% interest
in Oxford Springs. As of this filing, the Court has not approved the proposed settlement.
Intended result
Through the proposed settlements with FNBC, Sands, and Billings, the Receivership
Estate will own 100% of Oxford Springs and can sell its property free and clear of Oxford
Springs’s debt to FNBC. The proceeds of a future sale will go entirely to the Receivership Estate.
The proposed settlement with FNBC
The Receiver and FNBC have undertaken thoughtful negotiations and the Receiver
believes that settlement with FNBC is in the Receivership Estate’s best interest.
The Receiver advises the Court that FNBC was one of Madison Timber’s multiple banks
therefore the Receivership Estate has potentially substantial claims against FNBC arising from
FNBC’s banking relationship with Adams and Timber and any role that FNBC may be alleged to
have had in the Madison Timber Ponzi scheme (which FNBC denies). But the Receiver believes
the proposed settlement is preferable to a lawsuit under the circumstances. A lawsuit’s result is
never guaranteed. A lawsuit can take a long time to litigate to final judgment, and often a final
judgment is appealed. Settlement now avoids the likelihood of drawn-out litigation and the risk
of adverse rulings.
The Receiver also advises the Court that settlement now gives the Receivership Estate the
opportunity to sell a valuable piece of property and retain all of its proceeds. In exchange for a
release of the Receivership Estate’s claims against it and a channeling injunction, FNBC will
make a cash payment of $4,000,000.00 to the Receiver and provide the Receiver with a 60 day
2
Docket No. 59, Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679 (S.D. Miss).
EXHIBIT B
“Tender Period” from the “Effective Date” of the Settlement Agreement within which the
currently owed, by making a lump sum payment of $4,000,000.00 to FNBC, but the value of the
proposed settlement to the Receivership Estate is far greater. The proposed settlement with
FNBC will result in Sands conveying his 47.5% interest in Oxford Springs to the Receivership
Estate; that conveyance, coupled with the anticipated conveyance of Billings’s 5% interest, will
ensure the Receivership Estate owns 100% of Oxford Springs. By allowing the Receivership
Estate to retain all of the proceeds of from the future sale of Oxford Springs’s property, the
proposed settlement represents a value to the Receivership Estate that far exceeds $4,552,113.
For all these reasons, the Receiver recommends settlement with FNBC on the proposed
terms now, and the Court accepts her recommendation.
The public’s interest
The Settlement Agreement [Exhibit A] includes a channeling injunction, sometimes
called a “bar order,” which would bar any person or non-regulatory entity3 from separately
asserting claims against FNBC arising out of, in connection with, or relating to Adams and/or
Madison Timber. Those claims instead would be “channeled” through the Receivership Estate.
The Court, mindful that victims of the Madison Timber Ponzi scheme have a substantial
interest in the Receiver’s claims against FNBC and the proposed resolution of it, allowed
interested parties an opportunity to be heard before the proposed settlement was approved. The
Court entered an Order Setting Hearing, filed in the Court’s public record for the case styled
Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-252 (S.D. Miss). The Order
3
To be clear, the U.S. Attorney’s Office, the F.B.I., the S.E.C., and the Mississippi Secretary of State, among other
law enforcement bodies, are not affected by the proposed settlement. The Receiver does not purport to recommend
any settlement that would interfere with their separate work.
EXHIBIT B
Setting Hearing instructed the Receiver to publicize the Order Setting Hearing, the proposed
Settlement Agreement, the proposed Order Approving Settlement, and instructions for
submitting comments or objections on her website and in any forthcoming Receiver’s Report.
Victims or other interested parties who wished to submit comments or objections were
advised to do so at least five days prior to the Court’s hearing, either by submitting the comments
or objections to the Court or to the Receiver, who submitted them to the Court. Victims or other
interested parties who wished to address the proposed settlement at the hearing were given an
opportunity to be speak.
The Court is satisfied that the notice and hearing provided gave victims and interested
parties a full and fair opportunity to be heard and gave the Court the benefit of their opinions as
the Court assessed the proposed settlement’s merits. The notice and hearing provided was
efficient and desirable under the circumstances, given the particular interests at stake.4
ORDER
counsel, the Court finds that the terms of the Settlement Agreement are adequate, fair,
reasonable, and equitable; and that a bar order is appropriate. The Settlement Agreement should
be and is hereby APPROVED.
Accordingly, the Court hereby ORDERS as follows:
1. The terms used in this Order Approving Settlement that are defined in the
Settlement Agreement between the Receiver and FNBC, unless expressly otherwise defined
herein, shall have the same meaning as in the Settlement Agreement.
4
The Court takes no position on whether notice or hearing is appropriate prior to the Court’s approval of possible
future settlement with other parties.
EXHIBIT B
2. This Court has “broad powers and wide discretion to determine the appropriate
relief in an equity receivership,” including the “inherent equitable authority to issue a variety of
‘ancillary relief’ measures in actions brought by the SEC to enforce the federal securities laws.”
S.E.C. v. Kaleta, 530 Fed. App’x 360, 362 (5th Cir. 2013) (Kaleta I) (quoting S.E.C. v. Wencke,
622 F.2d 1363, 1369 (9th Cir. 1980)). These “ancillary relief” measures include “injunctions to
stay proceedings by nonparties against the receivership” and “bar orders to secure settlements in
receivership proceedings and to ‘preserve the property placed in receivership pursuant to SEC
actions.’” S.E.C. v. Stanford Int’l Bank, Ltd., No. 3:09-cv-00298-N, 2017 WL 9989250, at *2
(N.D. Tex. Aug. 23, 2017) (quoting Kaleta I, 530 Fed. App’x at 362). See also Zacarias v.
Stanford Int’l Bank, Ltd., No. 17-11073, 2019 WL 3281687, at *9 (5th Cir. July 22, 2019)
(“Again, the receivership solves a collective-action problem among the Stanford entities’
defrauded creditors, all suffering losses in the same Ponzi scheme. It maximizes assets available
to them and facilitates an orderly and equitable distribution of those assets. . . . It was no abuse of
discretion for the district court to enter the bar orders to effectuate and preserve the coordinating
function of the receivership.”); see also id. at *8 (“The bar order functioned to channel investors’
recovery into the receivership distribution process and ‘did not interfere with or improperly
extinguish the [investors’] rights.’”) (quoting S.E.C. v. Stanford Int’l Bank, Ltd., 927 F.3d 830,
851 (5th Cir. 2019)).
3. This Court has jurisdiction over the subject matter of this action, and the Receiver is
a proper party to seek entry of this Order Approving Settlement.
4. The notice provided by this Court in the Order Setting Hearing and by the Receiver
through her website and her Receiver’s Report was reasonably calculated, under the
circumstances, to apprise all interested parties, and in particular, victims of the Madison Timber
EXHIBIT B
Ponzi scheme, of the Settlement Agreement and the releases and bar order provided therein. The
notice was also reasonably calculated, under the circumstances, to apprise all interested parties,
and in particular, victims of the Madison Timber Ponzi scheme, of their right to object to the
Settlement Agreement and the releases and bar order provided therein and to appear at the
hearing on the motion. The notice was adequate, sufficient, and the best notice practicable and
met all applicable requirements of law.
5. The Settlement Agreement was reached after a full investigation of the facts by the
Receiver. The Settlement Agreement was negotiated, proposed, and entered into between the
Receiver and FNBC in good faith and at arm’s length. The parties were well-represented and
competent to evaluate the strengths and weaknesses of all claims and defenses.
6. The value of the Settlement Agreement to the Receivership Estate is far greater than
the $4,000,000.00 cash payment that FNBC will make to the Receiver and the 60 day “Tender
Period” from the “Effective Date” of the Settlement Agreement within which the Receiver may
satisfy all outstanding loans by FNBC to Oxford Springs, on which $4,552,113 is currently
owed, by making a lump sum payment of $4,000,000.00 to FNBC Settlement Agreement will
result in the Receivership Estate’s owning a 100% interest in Oxford Springs and retaining all of
the proceeds from the future sale of Oxford Springs’s property.
7. The bar order enjoining any person or non-regulatory entity5 from commencing or
continuing any judicial, administrative, arbitration, or other proceeding, and/or asserting or
prosecuting any causes of action against FNBC arising out of, in connection with, or relating in
any way arising out of or relating to FNBC’s banking relationship with Adams or Madison
5
law enforcement bodies, are not affected by the Settlement Agreement or Bar Order. The Court does not purport to
approve any settlement that would interfere with their separate work.
10
EXHIBIT B
Timber of any investment in the Madison Timber Ponzi scheme is necessary and appropriate
ancillary relief to this settlement. See Kaleta I, 530 Fed. App’x at 362.
8. The parties and their counsel have at all times complied with the requirements of
Rule 11 of the Federal Rules of Civil Procedure.
9. The Court finds that the Settlement Agreement is, in all respects, fair, reasonable,
and adequate, and in the best interests of all parties claiming an interest in or asserting any claim
against FNBC or the Receivership Estate. The Court further finds that a bar order is a necessary
component to achieve the Settlement Agreement and to ensure maximum recovery to the
10. The Settlement Agreement, the terms of which are fully set forth in the document
itself, is hereby fully and finally approved. The parties are directed to implement and
consummate the Settlement Agreement in accordance with its terms and with this Order
Approving Settlement.
11. The Court hereby permanently bars, restrains, and enjoins any person or non-
regulatory entity from commencing or continuing any judicial, administrative, arbitration, or
other proceeding, and/or asserting or prosecuting any claims or causes of action against FNBC
arising out of, in connection with, or relating in any way arising out of or relating to FNBC’s
banking relationship with Adams and/or Madison Timber, or any investment in the Madison
Timber Ponzi scheme. Such causes of action are instead channeled “into the receivership
distribution process.” Zacarias, 2019 WL 3281687, at *9.
12. Nothing in this Order Approving Settlement or the Settlement Agreement and no
aspect of the Settlement Agreement or negotiation thereof is or shall be construed to be an
admission or concession of any violation of any statute or law, of any fault, liability, or
11
EXHIBIT B
wrongdoing, or of any infirmity in the claims or defenses of any party in any other proceeding by
the Receiver or FNBC.
13. FNBC shall deliver or cause to be delivered the Settlement Payment in accordance
with the terms of the Settlement Agreement.
14. Without in any way affecting the finality of this Order Approving Settlement, the
Court retains continuing and exclusive jurisdiction over the parties for the purposes of, among
other things, the administration, interpretation, consummation, and enforcement of the
Settlement Agreement, including, without limitation, the releases and bar order described in the
Settlement Agreement and set forth in this Order.
15. The Court expressly finds and determines, pursuant to Federal Rule of Civil
Procedure 54(b), that there is no just reason for any delay in the entry of this Order Approving
Settlement, which is both final and appealable, and immediate entry by the Clerk of the Court is
expressly directed.
16. This Order Approving Settlement shall be filed in the Court’s public record and
shall be served by counsel for the Receiver, via email, first class mail or international delivery
service, on any person or entity that filed an objection to approval of the Settlement Agreement.
DATED: _____________ ________________________________

Honorable Carlton W. Reeves
United States District Judge
12
EXHIBIT B

NORTHERN DIVISION

COMMISSION

v.

Defendants.
PROPOSED ORDER APPROVING SETTLEMENT
EXHIBIT B
Before the Court is the Motion for Approval of Proposed Settlement with First Valley
National Corp. and its wholly owned subsidiary First National Bank of Clarksdale (“FNBC”)
filed by Alysson Mills, in her capacity as the court-appointed receiver (the “Receiver”) for
Arthur Lamar Adams (“Adams”) and Madison Timber Properties, LLC (“Madison Timber”).
The motion asks the Court to approve the Receiver’s proposed settlement with FNBC. In
exchange for the Receiver’s and Receivership Estate’s release of any claims against FNBC
arising from FNBC’s banking relationship with Adams and Madison Timber and any role that
FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which FNBC denies)
and a channeling injunction, FNBC agrees to make a cash payment of $4,000,000.00 to the
Receiver and provide the Receiver with a 60 day “Tender Period” from the “Effective Date” of
the Settlement Agreement within which the Receiver may satisfy all outstanding loans by FNBC
to Oxford Springs, LLC (“Oxford Springs”), on which $4,552,113 is currently owed, by making
a lump sum payment of $4,000,000.00 to FNBC.
counsel, the Court GRANTS the motion.
BACKGROUND
Estate” and to investigate and “bring such legal actions based on law or equity in any state,
as Receiver.”1
1
EXHIBIT B
Oxford Springs
“Receivership Property” and “assets owned by the Receivership Estate” include
Adams’s, and now the Receivership Estate’s, interest in Oxford Springs.
Oxford Springs is a Delaware limited liability company formed in 2014. Its sole asset is
approximately 2,400 acres of undeveloped land in Lafayette County, Mississippi. It purchased
the property with the intent to develop an upscale neighborhood with an equestrian park and golf
course near Oxford, Mississippi. There has been no actual development on the property.
The Receivership Estate owns Adams’s 47.5% interest in Oxford Springs. Of the
remaining interests, Patrick Sands owns 47.5% and Mike Billings owns 5%.
FNBC
FNBC holds two deeds of trust over Oxford Springs’s property. Oxford Springs
purchased the property in two separate transactions and for each obtained a loan from FNBC:
Oxford Springs purchased the first approximately 2,300 acres (“Parcel 1”) on April 29,
2015 for $5,158,031.54. In connection with that purchase, it borrowed $4,224,812 from FNBC,
and FNBC obtained a deed of trust over the approximately 2,300 acres as well as personal
guarantees from Adams and Sands.
Oxford Springs purchased the additional approximately 100 acres (“Parcel 2”) on
September 23, 2016 for $1,000,000. In connection with that purchase, it borrowed $1,000,000
from FNBC, and FNBC obtained a deed of trust over the approximately 100 acres as well as
personal guarantees from Adams and Sands.
FNBC’s loans to Oxford Springs are cross-collateralized, and the current total balance is
$4,552,113.
EXHIBIT B
Attempted sale
Oxford Springs entered a contract to sell Parcels 1 and 2 earlier this year. That sale failed
after the buyer declined to purchase Parcel 2 and sought to adjust the purchase price accordingly.
Oxford Springs could have sold only Parcel 1 to the buyer, but after paying off FNBC’s loans
and other debts and dividing what remained among Oxford Springs’s members, the Receivership
Estate would have received little, if any, proceeds from the sale. The Receiver refused to sell
under those circumstances.
The failed sale caused the Receiver’s counsel to reassess the Receivership Estate’s
options. Oxford Springs’s property is valuable and can be sold for several millions of dollars, but
no sale will meaningfully benefit the Receivership Estate so long as it must first pay off FNBC
and Oxford Springs’s other members. To maximize Oxford Springs’s value to the Receivership
Estate, the Receiver’s counsel devised a plan to own 100% of Oxford Springs and to sell its
property free and clear of Oxford Springs’s debt to FNBC.
The Receiver’s negotiations—FNBC
Oxford Springs owes FNBC $4,552,113.
Separately, FNBC was one of Madison Timber’s multiple banks and is a likely defendant
in a lawsuit by the Receivership Estate. The Receiver presented FNBC with a draft complaint
asserting claims arising from FNBC’s banking relationship with Adams and Madison Timber
and any role that FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which
FNBC denies).
After thoughtful negotiation, FNBC agreed to make a cash payment of $4,000,000.00 to
the Receiver and provide the Receiver with a 60 day “Tender Period” from the “Effective Date”
of the Settlement Agreement within which the Receiver may satisfy all outstanding loans by
EXHIBIT B
FNBC to Oxford Springs, on which $4,552,113 is currently owed, by making a lump sum
payment of $4,000,000.00 to FNBC in exchange for the Receiver’s release of any claims against
FNBC arising from FNBC’s banking relationship with Adams and Madison Timber and any role
that FNBC may be alleged to have had in the Madison Timber Ponzi scheme (which FNBC
denies) and a channeling injunction.
The Receiver’s negotiations—Sands
Sands owns a 47.5% interest in Oxford Springs and is a guarantor of FNBC’s two loans
to Oxford Springs.
Separately, Sands was a Madison Timber investor and is a likely claimant of the
Receivership Estate to the extent he still holds outstanding Madison Timber promissory notes.
Sands agreed to convey to the Receivership Estate his 47.5% interest in Oxford Springs
and also release the Receivership Estate of any claim by him to amounts due under his
outstanding Madison Timber promissory notes in exchange for the Receiver’s obtaining from
FNBC a release of his guarantees of FNBC’s loans to Oxford Springs. Simultaneously with the
filing of her motion to approve her proposed settlement with FNBC, the Receiver filed a motion
to approve the Receiver’s proposed settlement with Sands.
The Receiver’s negotiations—Billings
Billings owns a 5% interest in Oxford Springs.
Billings is a defendant in the lawsuit styled Alysson Mills v. Michael D. Billings, et al.,
No. 3:18-cv-679 (S.D. Miss.), in which the Receiver alleges he received millions of dollars in
“commissions” in exchange for his recruitment of new investors to Madison Timber. On July 9,
EXHIBIT B
2019, the Receiver filed a motion for approval of a proposed settlement with Billings.2 As part
of that proposed settlement, Billings agreed to convey to the Receivership Estate his 5% interest
in Oxford Springs. As of this filing, the Court has not approved the proposed settlement.
Intended result
Through the proposed settlements with FNBC, Sands, and Billings, the Receivership
Estate will own 100% of Oxford Springs and can sell its property free and clear of Oxford
Springs’s debt to FNBC. The proceeds of a future sale will go entirely to the Receivership Estate.
The proposed settlement with FNBC
The Receiver and FNBC have undertaken thoughtful negotiations and the Receiver
believes that settlement with FNBC is in the Receivership Estate’s best interest.
The Receiver advises the Court that FNBC was one of Madison Timber’s multiple banks
therefore the Receivership Estate has potentially substantial claims against FNBC arising from
FNBC’s banking relationship with Adams and Timber and any role that FNBC may be alleged to
have had in the Madison Timber Ponzi scheme (which FNBC denies). But the Receiver believes
the proposed settlement is preferable to a lawsuit under the circumstances. A lawsuit’s result is
never guaranteed. A lawsuit can take a long time to litigate to final judgment, and often a final
judgment is appealed. Settlement now avoids the likelihood of drawn-out litigation and the risk
of adverse rulings.
The Receiver also advises the Court that settlement now gives the Receivership Estate the
opportunity to sell a valuable piece of property and retain all of its proceeds. In exchange for a
release of the Receivership Estate’s claims against it and a channeling injunction, FNBC will
make a cash payment of $4,000,000.00 to the Receiver and provide the Receiver with a 60 day
2
Docket No. 59, Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679 (S.D. Miss).
EXHIBIT B
“Tender Period” from the “Effective Date” of the Settlement Agreement within which the
currently owed, by making a lump sum payment of $4,000,000.00 to FNBC, but the value of the
proposed settlement to the Receivership Estate is far greater. The proposed settlement with
FNBC will result in Sands conveying his 47.5% interest in Oxford Springs to the Receivership
Estate; that conveyance, coupled with the anticipated conveyance of Billings’s 5% interest, will
ensure the Receivership Estate owns 100% of Oxford Springs. By allowing the Receivership
Estate to retain all of the proceeds of from the future sale of Oxford Springs’s property, the
proposed settlement represents a value to the Receivership Estate that far exceeds $4,552,113.
For all these reasons, the Receiver recommends settlement with FNBC on the proposed
terms now, and the Court accepts her recommendation.
The public’s interest
The Settlement Agreement [Exhibit A] includes a channeling injunction, sometimes
called a “bar order,” which would bar any person or non-regulatory entity3 from separately
asserting claims against FNBC arising out of, in connection with, or relating to Adams and/or
Madison Timber. Those claims instead would be “channeled” through the Receivership Estate.
The Court, mindful that victims of the Madison Timber Ponzi scheme have a substantial
interest in the Receiver’s claims against FNBC and the proposed resolution of it, allowed
interested parties an opportunity to be heard before the proposed settlement was approved. The
Court entered an Order Setting Hearing, filed in the Court’s public record for the case styled
Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-252 (S.D. Miss). The Order
3
law enforcement bodies, are not affected by the proposed settlement. The Receiver does not purport to recommend
any settlement that would interfere with their separate work.
EXHIBIT B
Setting Hearing instructed the Receiver to publicize the Order Setting Hearing, the proposed
Settlement Agreement, the proposed Order Approving Settlement, and instructions for
submitting comments or objections on her website and in any forthcoming Receiver’s Report.
Victims or other interested parties who wished to submit comments or objections were
advised to do so at least five days prior to the Court’s hearing, either by submitting the comments
or objections to the Court or to the Receiver, who submitted them to the Court. Victims or other
interested parties who wished to address the proposed settlement at the hearing were given an
opportunity to be speak.
The Court is satisfied that the notice and hearing provided gave victims and interested
parties a full and fair opportunity to be heard and gave the Court the benefit of their opinions as
the Court assessed the proposed settlement’s merits. The notice and hearing provided was
efficient and desirable under the circumstances, given the particular interests at stake.4
ORDER
counsel, the Court finds that the terms of the Settlement Agreement are adequate, fair,
reasonable, and equitable; and that a bar order is appropriate. The Settlement Agreement should
be and is hereby APPROVED.
Settlement Agreement between the Receiver and FNBC, unless expressly otherwise defined
herein, shall have the same meaning as in the Settlement Agreement.
4
The Court takes no position on whether notice or hearing is appropriate prior to the Court’s approval of possible
future settlement with other parties.
EXHIBIT B
2. This Court has “broad powers and wide discretion to determine the appropriate
relief in an equity receivership,” including the “inherent equitable authority to issue a variety of
‘ancillary relief’ measures in actions brought by the SEC to enforce the federal securities laws.”
S.E.C. v. Kaleta, 530 Fed. App’x 360, 362 (5th Cir. 2013) (Kaleta I) (quoting S.E.C. v. Wencke,
622 F.2d 1363, 1369 (9th Cir. 1980)). These “ancillary relief” measures include “injunctions to
stay proceedings by nonparties against the receivership” and “bar orders to secure settlements in
receivership proceedings and to ‘preserve the property placed in receivership pursuant to SEC
actions.’” S.E.C. v. Stanford Int’l Bank, Ltd., No. 3:09-cv-00298-N, 2017 WL 9989250, at *2
(N.D. Tex. Aug. 23, 2017) (quoting Kaleta I, 530 Fed. App’x at 362). See also Zacarias v.
Stanford Int’l Bank, Ltd., No. 17-11073, 2019 WL 3281687, at *9 (5th Cir. July 22, 2019)
(“Again, the receivership solves a collective-action problem among the Stanford entities’
defrauded creditors, all suffering losses in the same Ponzi scheme. It maximizes assets available
to them and facilitates an orderly and equitable distribution of those assets. . . . It was no abuse of
discretion for the district court to enter the bar orders to effectuate and preserve the coordinating
function of the receivership.”); see also id. at *8 (“The bar order functioned to channel investors’
recovery into the receivership distribution process and ‘did not interfere with or improperly
extinguish the [investors’] rights.’”) (quoting S.E.C. v. Stanford Int’l Bank, Ltd., 927 F.3d 830,
851 (5th Cir. 2019)).
4. The notice provided by this Court in the Order Setting Hearing and by the Receiver
through her website and her Receiver’s Report was reasonably calculated, under the
circumstances, to apprise all interested parties, and in particular, victims of the Madison Timber
EXHIBIT B
Ponzi scheme, of the Settlement Agreement and the releases and bar order provided therein. The
notice was also reasonably calculated, under the circumstances, to apprise all interested parties,
and in particular, victims of the Madison Timber Ponzi scheme, of their right to object to the
Settlement Agreement and the releases and bar order provided therein and to appear at the
hearing on the motion. The notice was adequate, sufficient, and the best notice practicable and
met all applicable requirements of law.
5. The Settlement Agreement was reached after a full investigation of the facts by the
Receiver. The Settlement Agreement was negotiated, proposed, and entered into between the
Receiver and FNBC in good faith and at arm’s length. The parties were well-represented and
competent to evaluate the strengths and weaknesses of all claims and defenses.
6. The value of the Settlement Agreement to the Receivership Estate is far greater than
the $4,000,000.00 cash payment that FNBC will make to the Receiver and the 60 day “Tender
Period” from the “Effective Date” of the Settlement Agreement within which the Receiver may
satisfy all outstanding loans by FNBC to Oxford Springs, on which $4,552,113 is currently
owed, by making a lump sum payment of $4,000,000.00 to FNBC Settlement Agreement will
result in the Receivership Estate’s owning a 100% interest in Oxford Springs and retaining all of
the proceeds from the future sale of Oxford Springs’s property.
7. The bar order enjoining any person or non-regulatory entity5 from commencing or
continuing any judicial, administrative, arbitration, or other proceeding, and/or asserting or
prosecuting any causes of action against FNBC arising out of, in connection with, or relating in
any way arising out of or relating to FNBC’s banking relationship with Adams or Madison
5
law enforcement bodies, are not affected by the Settlement Agreement or Bar Order. The Court does not purport to
approve any settlement that would interfere with their separate work.
10
EXHIBIT B
Timber of any investment in the Madison Timber Ponzi scheme is necessary and appropriate
ancillary relief to this settlement. See Kaleta I, 530 Fed. App’x at 362.
9. The Court finds that the Settlement Agreement is, in all respects, fair, reasonable,
and adequate, and in the best interests of all parties claiming an interest in or asserting any claim
against FNBC or the Receivership Estate. The Court further finds that a bar order is a necessary
component to achieve the Settlement Agreement and to ensure maximum recovery to the
10. The Settlement Agreement, the terms of which are fully set forth in the document
itself, is hereby fully and finally approved. The parties are directed to implement and
consummate the Settlement Agreement in accordance with its terms and with this Order
Approving Settlement.
11. The Court hereby permanently bars, restrains, and enjoins any person or non-
regulatory entity from commencing or continuing any judicial, administrative, arbitration, or
other proceeding, and/or asserting or prosecuting any claims or causes of action against FNBC
arising out of, in connection with, or relating in any way arising out of or relating to FNBC’s
banking relationship with Adams and/or Madison Timber, or any investment in the Madison
Timber Ponzi scheme. Such causes of action are instead channeled “into the receivership
distribution process.” Zacarias, 2019 WL 3281687, at *9.
11
EXHIBIT B
wrongdoing, or of any infirmity in the claims or defenses of any party in any other proceeding by
the Receiver or FNBC.
13. FNBC shall deliver or cause to be delivered the Settlement Payment in accordance
with the terms of the Settlement Agreement.
Settlement Agreement, including, without limitation, the releases and bar order described in the
Settlement Agreement and set forth in this Order.
15. The Court expressly finds and determines, pursuant to Federal Rule of Civil
Procedure 54(b), that there is no just reason for any delay in the entry of this Order Approving
Settlement, which is both final and appealable, and immediate entry by the Clerk of the Court is
expressly directed.
16. This Order Approving Settlement shall be filed in the Court’s public record and
shall be served by counsel for the Receiver, via email, first class mail or international delivery
service, on any person or entity that filed an objection to approval of the Settlement Agreement.
DATED: _____________ ________________________________

Honorable Carlton W. Reeves
12
EXHIBIT B

NORTHERN DIVISION

COMMISSION,
v. Hon. F. Keith Ball, Magistrate Judge

Defendants.
ORDER APPROVING SETTLEMENT
Before the Court is the Motion for Approval of Settlement filed by Alysson Mills, in her
capacity as the court-appointed receiver (the “Receiver”) for Arthur Lamar Adams and Madison
Timber Properties, LLC. Docket No. 168. No party has filed any objections to the motion.
The motion asks the Court to approve the Receiver’s Settlement Agreement with
Operation Grace World Missions, Inc. After consideration, the Court finds that settlement with
Operation Grace World Missions on the proposed terms without litigation is in the Receivership
Estate’s best interests. The Court thus GRANTS the Receiver’s motion.
BACKGROUND
Estate” 1 and to investigate and “bring such legal actions based on law or equity in any state,
as Receiver.” 2
Immediately following her appointment, the Receiver and her counsel began
investigating claims against potential defendants who may be in possession of assets of the
Receivership Estate, including against individuals and entities who received cash contributions
from Arthur Lamar Adams, Madison Timber Properties, LLC, or their agents.
After an accounting, the Receiver determined that Operation Grace World Missions had
received contributions from Arthur Lamar Adams and Terry Wayne Kelly totaling $40,500.
Operation Grace World Missions’ contributions from Lamar Adams and Wayne Kelly
The Receiver does not allege any wrongdoing by Operation Grace World Missions, only
that it received cash contributions from Adams and Kelly that Adams and Kelly made with
proceeds of the Madison Timber Ponzi scheme.
Operation Grace World Missions has agreed to return 100% of the contributions it
received from Lamar Adams, totaling $17,000. All of Kelly’s donations to Operation Grace
World Missions were made through his company, Kelly Management, LLC. The Receiver
1
2
By order dated August 22, 2018, the Court eliminated the requirement that the Receiver obtain “prior
approval of this Court upon ex parte request” before bringing any legal action. Docket No. 38, Securities
& Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).
determined that during the time period of 2009 until April of 2018, all but immaterial amounts of
Kelly Management, LLC’s income was provided by proceeds of the Madison Timber Ponzi
scheme. For this reason, the Receiver has agreed to the return of 95% of the donations Operation
Grace World Missions received from Wayne Kelly, amounting to $22,325. The Receiver
believes this is fair and reasonable consideration for the avoidance of the time and expense that
would have accompanied any litigation.
The Receiver’s potential claims
It is the Receiver’s position that the contributions Operation Grace World Missions
received for which it did not provide any tangible benefits to Adams or Kelly are voidable
fraudulent transfers because no reasonably equivalent value was provided for the transfers. See
Janvey v. Democratic Senatorial Campaign Committee, 793 F. Supp. 2d 825, 857–58 (N.D. Tex.
2011) (granting summary judgment on fraudulent transfer claims to recover contributions to
political campaigns).
The Receiver Operation Grace World Missions have agreed to resolve the Receivership
Estate’s claims to the contributions in question without litigation. Operation Grace World
Missions shall return to the Receivership Estate $39,325, which reflects all contributions made to
it by Adams and 95% of the contributions made to them by Kelly. In turn, the Receiver shall
release all claims the Receivership Estate has or may have against Operation Grace World
Missions.
ORDER
After consideration, the Court finds that the terms of the Settlement Agreement are
adequate, fair, reasonable, and equitable. The Settlement Agreement should be and is hereby
APPROVED.
Settlement Agreement between the Receiver and Operation Grace World Missions, respectively,
unless expressly otherwise defined herein, shall have the same meaning as in the Settlement
Agreement.
3. The Settlement Agreement followed meaningful, informed, arm’s-length
negotiations between the Receiver and Operation Grace World Missions, each represented by
highly capable counsel.
5. The Settlement Agreement is, in all respects, fair, reasonable, and adequate and is
hereby fully and finally approved. The parties are directed to implement and consummate the
Settlement Agreement in accordance with its terms and with this Order Approving Settlement.
wrongdoing, or of any infirmity in the claims or defenses of any party in any other proceeding.
7. Operation Grace World Missions shall deliver or cause to be delivered the
Settlement Payment in accordance with the terms of the Settlement Agreement.
Settlement Agreement.
SO ORDERED, this the 16th day of August, 2019.
s/ Carlton W. Reeves
UNITED STATES DISTRICT JUDGE

NORTHERN DIVISION

COMMISSION,
v. Hon. F. Keith Ball, Magistrate Judge

Defendants.
ORDER APPROVING SETTLEMENTS
Before the Court is the Motion for Approval of Settlements filed by Alysson Mills, in her
capacity as the court-appointed receiver (the “Receiver”) for Arthur Lamar Adams and Madison
Timber Properties, LLC. Docket No. 166. No party has filed any objections to the motion.
The motion asks the Court to approve the Receiver’s Settlement Agreements with
Berachah Church (“Berachah”) and R.B. Thieme, Jr. Bible Ministries (“R.B. Thieme
Ministries”) (collectively, the “Ministries”). After consideration, the Court finds that settlements
with Berachah Church and R.B. Thieme Ministries on the proposed terms without litigation is in
the Receivership Estate’s best interests. The Court thus GRANTS the Receiver’s motion.
BACKGROUND
Estate” 1 and to investigate and “bring such legal actions based on law or equity in any state,
as Receiver.” 2
Immediately following her appointment, the Receiver and her counsel began
investigating claims against potential defendants who may be in possession of assets of the
Receivership Estate, including against individuals and entities who received cash contributions
from Arthur Lamar Adams, Madison Timber Properties, LLC, or their agents.
After an accounting, the Receiver determined that the Ministries had received
contributions from Arthur Lamar Adams and Terry Wayne Kelly totaling $287,573. 3
The Ministries’ contributions from Lamar Adams and Wayne Kelly
The Receiver does not allege any wrongdoing by the Ministries, only that they received
cash contributions from Adams and Kelly that Adams and Kelly made with proceeds of the
Madison Timber Ponzi scheme.
The Ministries have agreed to return 100% of the contributions they received from Lamar
Adams, totaling $104,274 from Berachah and $42,449 from R.B. Thieme Ministries. All of
1
2
By order dated August 22, 2018, the Court eliminated the requirement that the Receiver obtain “prior
approval of this Court upon ex parte request” before bringing any legal action. Docket No. 38, Securities
& Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).
3
Berachah Church received contributions amounting to $179,674 from Lamar Adams and Wayne Kelly.
R.B. Thieme Jr. Bible Ministries received $107,899.
Kelly’s donations to the Ministries were made through his company, Kelly Management, LLC.
The Receiver determined that during the time period of 2009 until April of 2018, all but
immaterial amounts of Kelly Management, LLC’s income was provided by proceeds of the
Madison Timber Ponzi scheme. For this reason, the Receiver has agreed to the return of 95% of
the donations the Ministries received from Wayne Kelly, amounting to $71,630 from Berachah
and $62,177.50 from R.B. Thieme Ministries. The Receiver believes this is fair and reasonable
consideration for the avoidance of the time and expense that would have accompanied any
litigation.
The Receiver’s potential claims
It is the Receiver’s position that the contributions the Ministries received for which they
did not provide any tangible benefits to Adams or Kelly are voidable fraudulent transfers because
no reasonably equivalent value was provided for the transfers. See Janvey v. Democratic
Senatorial Campaign Committee, 793 F. Supp. 2d 825, 857–58 (N.D. Tex. 2011) (granting
summary judgment on fraudulent transfer claims to recover contributions to political campaigns).
The Receiver and the Ministries have agreed to resolve the Receivership Estate’s claims
to the contributions in question without litigation. Berachah shall return to the Receivership
Estate $175,904, which reflects all contributions made to it by Adams and 95% of the
contributions made to them by Kelly. R.B. Thieme Ministries shall return to the Receivership
Estate $104,626.50, which reflects all contributions made to it by Adams and 95% of the
contributions made to them by Kelly. In turn, the Receiver shall release all claims the
Receivership Estate has or may have against Berachah Church and R.B. Thieme Ministries.
ORDER
After consideration, the Court finds that the terms of the Settlement Agreements are
adequate, fair, reasonable, and equitable. The Settlement Agreements should be and are hereby
APPROVED.
1. The terms used in this Order Approving Settlements that are defined in the
Settlement Agreements between the Receiver and Berachah Church and R.B. Thieme Ministries,
respectively, unless expressly otherwise defined herein, shall have the same meaning as in the
Settlement Agreements.
a proper party to seek entry of this Order Approving Settlements.
3. The Settlement Agreements followed meaningful, informed, arm’s-length
negotiations between the Receiver and the Ministries, all represented by highly capable counsel.
5. The Settlement Agreements are, in all respects, fair, reasonable, and adequate and
are hereby fully and finally approved. The parties are directed to implement and consummate the
Settlement Agreements in accordance with their terms and with this Order Approving
Settlements.
6. Nothing in this Order Approving Settlements or the Settlement Agreements and no
aspect of the Settlement Agreements or negotiation thereof is or shall be construed to be an
wrongdoing, or of any infirmity in the claims or defenses of any party in any other proceeding.
7. The Ministries shall deliver or cause to be delivered the Settlement Payment in
accordance with the terms of their respective Settlement Agreement.
8. Without in any way affecting the finality of this Order Approving Settlements, the
Settlement Agreements.
SO ORDERED, this the 16th day of August, 2019.
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES & EXCHANGE PLAINTIFFS

COMMISSION, et al.,
V. CAUSE NO. 3:18-CV-252-CWR-FKB
ARTHUR LAMAR ADAMS, DEFENDANTS

et al.
ORDER FOR INTERIM RELIEF PENDING

APPOINTMENT OF A TEMPORARY RECEIVER
This Court, having determined that certain interim relief is appropriate to preserve the
assets of the Defendants pending the selection of a Temporary Receiver, orders as follows:
A. The Defendants and all persons receiving notice of this Order by personal service,
facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any
action or causing any action to be taken, without the prior order from this Court, which would:
1. Interfere with the Temporary Receiver’s eventual efforts to take control,

possession, or management of monies, funds, securities, credits, effects, goods, chattels,
lands, premises, leases, claims, rights and other assets, together with all rents, profits,
dividends, interest or other income attributable thereto, of whatever kind, which the
Defendants own, possess, have a beneficial interest in, or controls directly or indirectly
(“Receivership Property” or, collectively, the “Receivership Estate”); such prohibited
actions include but are not limited to, using self-help or executing or issuing or causing
the execution or issuance of any court attachment, subpoena, replevin, execution, or other
process for the purpose of impounding or taking possession of or interfering with or
creating or enforcing a lien upon any Receivership Property;
2. Dissipate or otherwise diminish the value of any Receivership Property;

such prohibited actions include but are not limited to, releasing claims or disposing,
transferring, exchanging, assigning or in any way conveying any Receivership Property,
enforcing judgments, assessments or claims against any Receivership Property or any
Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke
or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security
agreement or other agreement executed by any Defendant or which otherwise affects any
Receivership Property; or,
3. Interfere in any manner with the exclusive jurisdiction of this Court over
the Receivership Estate.
4. Nothing in paragraph A herein shall prohibit any business in which either

defendant owns an interest and which is managed by a third party from entering into
commercially reasonable agreements on behalf of that business or continuing to pay
operating expenses for that business as they come due in the ordinary course of business.
Management of any such businesses shall maintain a list of any such agreements and
payments and shall, upon appointment of a Temporary Receiver in this matter, provide
that list to the Temporary Receiver. This paragraph specifically authorizes the majority
owners of Delta Farm Land Investments LLC (“DFLI”), a Mississippi limited liability
company in which Defendant, Arthur Lamar Adams, owns a one-third interest, to take the
following actions:
a. To continue to operate and manage DFLI, including temporarily replacing

Arthur Lamar Adams as the managing member and registered agent for
service of process until the appointment of a Temporary Receiver (and the
filing with the Mississippi Secretary of State the documentation necessary to
effectuate such temporary appointment);
b. To open and maintain bank accounts and to make deposits and withdrawals
therefrom so as to continue to receive income and pay expenses, including all
taxes and assessments of any kind, as they come due in the ordinary course of
business (subject to audit and challenge as specified below by the Temporary
Receiver);
c. With regard to the real property described on the Promissory Note attached
hereto as Exhibit “A” (the “Subject Property”), which is owned by DFLI and
pledged as collateral for the Promissory Note, to make all payments as and
when due under the terms of the Promissory Note. The next such payment is
due on June 30, 2018, in the amount of $43,356.00. The majority members of
DFLI are authorized to make all payments due under the Promissory Note,
including the portion of such payments that would otherwise be due from
Arthur Lamar Adams. The majority members of DFLI are authorized to
recoup the amount of payments made on behalf of Arthur Lamar Adams from
future revenue of DFLI, including revenue from lease agreements or the
proceeds from a sale of the Subject Property, provided that no such
recoupment shall decrease Arthur Lamar Adams’s membership interest in
DFLI;
d. To enter into the following agreements regarding the Subject Property, which
are substantially similar to arrangements DFLI has previously entered into and
which generate revenue for DFLI: (i) an Agricultural Lease Contract in the
form attached hereto as Exhibit “B” and (ii) a Hunting Lease Agreement in
the form attached hereto as Exhibit “C”;
e. To continue to collect the income on and to renew when necessary, two
Conservation Reserve Program Contracts attached hereto as Exhibits “D” and
“E”; and
f. To continue to market for sale the Subject Property, provided that the
approval of the final terms of any sale of the Subject Property will be reserved
to this Court or the receiver, as appropriate.
DFLI shall maintain a list of payments and agreements necessary to effectuate the actions
listed above to be provided to this Court and the Temporary Receiver upon appointment.
The Temporary Receiver may challenge any of the actions taken pursuant to this
paragraph only on the basis of (1) not being in the ordinary course of business; (2)
pursuant to any contractual right that Arthur Lamar Adams may have under the DFLI
operating agreements; or (3) pursuant to any rights provided by Mississippi law to
minority members of limited liability companies.
B. As set forth in detail below, the following proceedings, excluding the instant
proceeding and all police or regulatory actions and actions of the Commission related to the
above-captioned enforcement action, are stayed until further Order of this Court:
All civil legal proceedings of any nature, including, but not limited to, bankruptcy
proceedings, arbitration proceedings, foreclosure actions, default proceedings, or other
actions of any nature involving: (a) any Receivership Property, wherever located; (b) any
of the Defendants, including but not limited to its subsidiaries and partnerships; or, (c)
any of the Defendants’ past or present officers, directors, managers, agents, or general or
limited partners sued for, or in connection with, any action taken by them while acting in
such capacity of any nature, whether as plaintiff, defendant, third-party plaintiff, third-
party defendant, or otherwise (such proceedings are hereinafter referred to as “Ancillary
Proceedings”).
C. The parties to any and all Ancillary Proceedings are enjoined from commencing
or continuing any such legal proceeding, or from taking any action, in connection with any such
proceeding, including, but not limited to, the issuance or employment of process.
D. All Ancillary Proceedings are stayed in their entirety, and all Courts having any
jurisdiction thereof are enjoined from taking or permitting any action until further Order of this
Court. Further, as to a cause of action accrued or accruing in favor of one or more of the
Defendants against a third person or party, any applicable statute of limitation is tolled during the
period in which this injunction against commencement of legal proceedings is in effect as to that
cause of action.
E. The provisions of Paragraphs B – D above bar any person or entity from placing
either of the Defendants in bankruptcy proceedings.
SO ORDERED, this the 5th day of June, 2018.
____________________
No. 3:18-CV-252-CWR-FKB
SECURITIES & EXCHANGE COMMISSION,

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
ORDER ON RECEIVERSHIP
____________________
Before CARLTON W. REEVES, District Judge.

This case involves a multi-million dollar Ponzi scheme that
defrauded hundreds of investors. The ill-gotten gains of that
scheme now reside in Defendants’ estates. Both the Securities
and Exchange Commission and the Mississippi Secretary of
State have requested the appointment of a receiver to control

those estates and protect investor interests.1
District courts have a “well-established” power to appoint a
receiver in a case brought by the Commission when there is a
“showing of fraud and mismanagement, absent insolvency.”2
The architect of this Ponzi scheme has already pleaded guilty
to systematic fraud and mismanagement, and the relevant es-
tates likely contain millions of dollars.3 The motions to ap-
point a receiver are GRANTED.
The next question is whom this Court should appoint as re-
ceiver. A receiver is “a representative of the court” who acts
on “behalf of all parties,” rather than on behalf of a particular
party.4 The discretion to select a qualified receiver therefore
lies with the Court, not the parties.5
After considering the written and oral arguments of counsel,
the Court believes that the fairest method of selecting a re-
ceiver is as follows. On May 31, 2018, the Court will enter a
1 Emergency Motion, Docket No. 11; Emergency Motion, Docket No. 21.
2 Sec. & Exch. Comm'n v. First Fin. Grp. of Texas, 645 F.2d 429, 438 (5th Cir.
1981) (quoting Sec. & Exch. Comm'n v. Keller Corp., 323 F.2d 397, 403 (7th
Cir. 1963)).
3 See Plea Agreement, Docket No. 11 in United States v. Arthur Lamar Adams,
3:18-CR-88-CWR-LRA (S.D. Miss).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).
5 See Adelman v. CGS Sci. Corp., 332 F. Supp. 137, 149 (E.D. Pa. 1971); accord
Securities & Exchange Commission Office of the Inspector General, Over-

sight of Receivers and Distribution Agents, Report. No. 432 (2007) (“While a
judge in a securities case brought by the Commission usually appoints a
receiver recommended by Enforcement staff, the judge may select any
qualified receiver.”).
2
Request For Proposals Order soliciting bids for the receiver-

ship and the receiver’s primary counsel. By close of business
on May 29, therefore, the parties shall submit draft RFP Or-
ders containing the receivership application and schedule
they propose the Court adopt.
The parties have expressed concerns about immediate threats
to investors’ interests. The federal government retains great
power to address many of those threats through its prosecu-
tion of the parallel criminal case. If, however, the parties or
any other potential intervener believes that Defendants could
themselves mitigate immediate harm to investors’ interests
were it not for the existing Consent Order [Docket No. 5], they
may file an appropriate motion and a proposed Agreed Order
amending that Consent Order.
SO ORDERED, this the 25th day of May, 2018.
s/ CARLTON W. REEVES
3
____________________

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
____________________


Cir. 1963)).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).

2

3
1. What professional experience and skills qualify you to be receiver in this case?
C. RECEIVERSHIP STAFFING
1. What steps will you take to guarantee that your hiring pracices are as inclusive as possible, and what – if
any – billable hour targets do you aim to achieve?
2. Describe the law firms or other entities you hire to assist you, their qualifications, proposed rates, and
whether those rates reflect a discount from their standard rates.
3. Describe and justify the hourly rates for yourself and whether your rates reflect any discount from your
standard rate.
2
4. How will you and your staff take steps to minimize the expenses of the receivership?
5. How will you and your staff communicate with investors and keep them informed of proceedings?
D. CONFLICTS OF INTEREST
1. What potential conflicts of interest may arise during your receivership, including those of yourself and
any accounting firms, legal firms, or other support staff that you plan to hire?
2. Before your appointment, what steps will you take to check for (and eliminate) any of the above conflicts?
3
3. After your appointment, how will you guard against (and respond to) any conflicts that arise?
E. ADDITIONAL INFORMATION
Provide any further information you believe relevant to your candidacy for receivership.
F. SIGNATURE
By signing the below, you affirm that you have truthfully answered the above questions as an officer of the
court.
Signature of Applicant
Date
4
CONFLICTS OF INTEREST AND BACKGROUND INFORMATION FORM
Please complete a document that responds to all prompts listed below. Attach that document to this form
and sign the declaration below.
Except where otherwise noted, for purposes of the information request below, “you” means you as an
individual, as well as any spouse or dependents, and separately, any firm, partnership, joint venture, or
other business in which you are an officer or director, or in which you have a substantial financial interest.
Except where otherwise noted, this information is requested for any responsive matters existing during the last five
years. Also, if during the course of your duties you become aware of responsive information concerning a
potential claimant in the matter listed above, you must promptly supplement your response to disclose that
information.
1. List all contracts, consulting engagements, employment, service as an officer or director, or other work of
any kind you have performed for any defendant/respondent in this matter, or any of its parents, subsidiaries, or
other affiliates, or any claimant in this matter. Include any responsive matters existing during the last ten years.
2. List any financial interests in or with the defendant/respondent, its parents, subsidiaries, or other affiliates,
or any claimant in this matter (e.g., stocks, bonds, options, other debt or equity interests, partnerships, retirement
plans).
3. List all other personal or professional relationships or interests in or with the defendant/respondent, its
parents, subsidiaries, or other affiliates, or with any of their officers or directors, or any claimant in this matter, not
listed above.
4. List all matters in which you have been retained as a Receiver, Distribution Fund Administrator,
Distribution Consultant, or as a subcontractor, agent or other service provider, in connection with any civil action
or administrative proceeding by the Commission.
5. List all other prior or existing cases, matters, or proceedings in which the Commission or the Mississippi
Secretary of State has an interest, in which you have been retained or served as a witness, consultant, or other
expert.
6. Identify any disciplinary proceedings, felony criminal indictment or information (or equivalent formal
charge) or a misdemeanor criminal information (or equivalent formal charge), civil proceedings or actions against
you personally by any Federal, state, local, or foreign entities and the results of those proceedings. Include any
responsive matters regardless of when they arose.
7. Identify any actual or potential conflicts of which you are aware, regardless of when they arose, that are not
identified or addressed in paragraphs 1 through 5 above, but that may affect the performance of your duties under
this appointment.
5
DECLARATION
Under penalty of perjury, I declare the following:
I am providing the United States District Court for the Southern District of Mississippi with the following conflict
of interest and background information concerning the receivership created in the civil litigation styled Securities
& Exchange Commission, et al. v. Arthur Lamar Adams, et al., Case Number 3:18-cv-00252-CWR-FKB, in the
U.S. District Court for the Southern District of Mississippi, Northern Division. I agree to supplement this
information if any of the information herein changes, within thirty days of such change. I agree to provide such
other Conflict of Interest information as requested by the Court or its staff.
I have examined the information given in this statement, and attached hereto, and, to the best of my
knowledge and belief, it is true, correct, and complete. I understand that I am submitting this
information to the Court as an officer of the Court.
By: _______________________________________
Signature
Name: _______________________________________
Date: _______________________________________
6
____________________

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
____________________


Cir. 1963)).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).

2

3

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES AND EXCHANGE

COMMISSION,
Plaintiff,
v. Civil Action No.

3:18 –cv-252-CWR-FKB
MADISON TIMBER PROPERTIES,
LLC
Defendants,
MISSISSIPPI SECRETARY OF STATE’S UNOPPOSED

MOTION TO INTERVENE FOR THE LIMITED PURPOSE
OF OPPOSING THE SEC’S EXPEDITED MOTION
TO APPOINT TEMPORARY RECEIVER
The Mississippi Secretary of State (the “Secretary”) respectfully moves this Court, pursuant to
Fed. R. Civ. P. 24, for an order permitting the Secretary to intervene in the above-captioned action (the
“Madison Timber Action”) for the limited purpose of opposing the Securities and Exchange
Commission’s (“SEC”) Expedited Motion to Appoint Temporary Receiver and making his own
recommendation for the candidate to be chosen as the receiver in the above-styled action. In support of
this motion to intervene, the Secretary states as follows:
1. The Madison Timber Action was filed on April 20, 2018. The SEC filed its
complaint based on information and belief that Defendants committed securities fraud by operating a
Ponzi scheme, and it alleged that Defendants defrauded more than 150 investors out of at least $85
million.
2. The SEC requested injunctive relief that included freezing the assets of Defendants, relief
which requires the appointment of a receiver.
3. Defendant Adams, on April 20, 2018, entered a Consent Order, consenting to the
freezing of Defendants’ assets, to the appointment of a receiver, and to the transfer of all seized assets to
the Court-Appointed Receiver or the Registry of the Court.
4. On May 9, 2018, Defendant Adams pled guilty to a criminal charge of wire fraud.
5. On May 10, 2018, the SEC notified the Secretary of its intention to file its Expedited
Motion to Appoint Temporary Receiver with this Court, and it notified the Secretary that it was proposing
a Miami, Florida-based candidate for the position of receiver.
6. Defendants are Mississippi citizens. Upon information and believe, a large majority of
the investors in Defendants’ Ponzi scheme are Mississippi citizens.
7. Upon information and belief, most of the assets are situated in Mississippi.
8. The securities law violations alleged against Defendants, if proven, also constitute
violations of the Mississippi Security Act, under which the Secretary can assess fines, penalties, and other
sanctions such as restitution on behalf of Mississippi investors.
9. The Secretary has a significant interest in the appointment of receiver in this action, given
the number of Mississippi investors involved, significant assets being located in the State, the Secretary’s
own interest in the assets with respect to fines, penalties, and restitution to Mississippi investors, and the
receiver’s obligations and abilities to administer the recovery and restitution of investors’ funds. The
Secretary does not believe the SEC’s recommended appointment can protect those interests adequately
and effectively.
2
10. The Secretary has an alternative receiver candidate, situated in Mississippi, to
recommend to this Court, as to avoid any undue delay or prejudice. A copy of the Secretary’s alternative
receiver is attached hereto as Exhibit “A”.
11. Because the Secretary is not a party to the Madison Timber action, the Secretary has no
avenue to oppose the SEC’s recommendation for appointment of receiver in this action, or recommend
an alternative candidate. But the Secretary is charged with enforcing the Mississippi Securities Act and
protecting Mississippi investors and has significant interests in the property that is the subject of the action
and therefore seeks to intervene.
12. The Secretary therefore respectfully submits that he is entitled to intervene as of right
pursuant to Fed. R. Civ. P. Rule 24(a)(2) because the Court’s appointment of receiver may impair the
Secretary’s ability to protect the interests of Mississippi investors harmed by this scheme and may impair
the Secretary’s ability to discharge his duties under the Mississippi Securities Act.
13. In accordance with Local Rule 7(b)(10), the Secretary has conferred with counsel for
Defendants and counsel for the SEC. The Motion is unopposed by both counsel for the Defendants and
counsel for the SEC.
THIS the 11th day of May 2018.
Respectfully Submitted,
C. DELBERT HOSEMANN, JR., in his Official
Capacity as MISSISSIPPI SECRETARY OF
STATE
BY: JIM HOOD, ATTORNEY GENERAL FOR THE

STATE OF MISSISSIPPI
BY: /s/ Douglas T. Miracle

DOUGLAS T. MIRACLE, MSB # 9648
SPECIAL ASSISTANT ATTORNEY GENERAL
OFFICE OF THE ATTORNEY GENERAL
CIVIL LITIGATION DIVISION
Post Office Box 220
3
Jackson, Mississippi 39205

Telephone No. (601) 359-5654
Facsimile No. (601) 359-2003
dmira@ago.state.ms.us
OF COUNSEL
Jessica Leigh Long
Assistant Secretary of State
MSB #103316
Jeffrey L. Lee
Senior Attorney
MSB # 103180
Office of the Mississippi Secretary of State

Securities Division
125 S. Congress Street
Jackson, MS 39201
Telephone No. (601) 359-1650
Facsimile No. (601) 359-9070
I, Douglas T. Miracle, Special Assistant Attorney General for the State of Mississippi, do
hereby certify that on this date I electronically filed the foregoing document with the Clerk of
this Court using the ECF system, which sent notification of this filing to all counsel of record.
THIS the 11th day of May, 2018.
/s/ Douglas T. Miracle

DOUGLAS T. MIRACLE
4

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

Defendants,
MEMORADUM OF LAW IN SUPPORT OF

EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
In this securities fraud action, Plaintiff Securities and Exchange Commission
(“Commission”) respectfully moves the Court to appoint a temporary receiver over
Defendants’ assets to preserve them for the benefit of investors. Due to the continued
risk of dissipation of those assets, the Commission asks that the motion be heard as
expeditiously as the Court’s schedule permits.
I. Introduction and Background
In its Complaint, the Commission claims that, beginning in approximately
2004, Defendant Arthur Lamar Adams (“Adams”), through his wholly-owned

company, Madison Timber Properties, LLC (“MT Properties”), committed securities
fraud by operating a Ponzi scheme. [Dkt. 3, Compl., ¶ 1]. The Commission alleges
that Adams and MT Properties have raised at least $85 million from over 150
investors in multiple states. [Dkt. 3, Compl., ¶ 2].
Defendant Adams does not contest that he used MT Properties to conduct a
Ponzi scheme. At Adams’ change of plea hearing on May 9, 2018 in United States v.
Adams, No. 3:18-CR-88-CWR-LRA (S.D. Miss.), Adams pled guilty to the Bill of
Information filed against him for bank and wire fraud based on the same conduct.
Defendants and their agents still have control and possession of investor funds
as well as certain assets purchased with investor funds. Counsel for Defendant
Adams has identified interests owned by Adams in at least four real estate ventures.
See Exhibit A (May 8, 2018, Letter from John M. Colette). Upon information and
belief, Adams acquired at least some of these interests while the scheme alleged in
the Complaint was on-going. It is, thus, highly likely that such interests were
acquired, in whole or in part, with investor funds. Counsel for Adams has also
advised that several payments are coming due this month to maintain Adams’
ownership interests in these ventures. Id.
In addition, individual investors recently have filed lawsuits against Adams
and Madison Timber related to this scheme. See, e.g., Exhibit B. Absent a receiver
and the associated stay of third party litigation that would accompany his or her
2
appointment, there will be a “race to the courthouse” and the attendant possibility for
certain investors to obtain preferential treatment with respect to Defendants’ assets.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors. Moreover, in order to marshal
and preserve Defendants’ assets and identify other possible assets for the benefit of
the defrauded investors, the Commission asks the Court to use its equitable powers to
appoint a receiver to take control of those assets.
The Commission therefore seeks the appointment of a temporary receiver who
will, within 60 days, file a report that includes a preliminary plan for the
administration of the receivership estate, including recommendations as to the most
efficient means for marshalling, liquidating and distributing assets within that estate.
The Court, with input from the Commission, can then better determine whether the
receivership should be continued.
3
II. Equitable Power of District Courts to Order a Receivership
The Fifth Circuit and other courts have repeatedly emphasized the broad
equitable powers of district courts to shape remedies necessary to effectuate the
purposes of the federal securities laws, to preserve a defendant’s assets, and to ensure
that wrongdoers do not profit from their unlawful conduct. SEC v. Wencke, 622 F.2d
1393, 1371 (9th Cir. 1980); SEC v. Safety Fin. Serv., Inc., 674 F.2d 368, 372-73 (5th
Cir.1982) (“the district court has broad powers and wide discretion to determine . . .
relief in an equity receivership”); SEC v. Blatt, 583 F.2d 1325, 1335-1336 (5th Cir.
1978).
Based on long-standing principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. When a district court creates a receivership, the receiver’s focus is
“to safeguard the assets, administer the property as suitable, and to assist the district
court in achieving a final, equitable distribution of the assets if necessary.” Liberte
Capital Group, LLC v. Capwill, 462 F.3d 543, 551 (6th Cir. 2006).
4
The decision to create a receivership rests in the Court’s discretion. Bookout v.
First Nat. Mortg. & Discount Co., Inc., 514 F.2d 757, 758 (5th Cir. 1975).
III. Appointment of an SEC Receiver is Well-Established in the Fifth Circuit
The Fifth Circuit has recognized that “[t]he appointment of a receiver is a
well-established equitable remedy available to the SEC in its civil enforcement
proceedings for injunctive relief.” SEC v. First Fin. Group of Texas, 645 F.2d 429,
438 (5th Cir. 1981); see also Netsphere, Inc. v. Baron, 703 F.3d 296, 306 (5th Cir.
2012) (“Thus, in cases of non-compliance with SEC regulations, a receiver may be
appointed to prevent the corporation from dissipating corporate assets and to pay
defrauded investors.”). This discretion derives from the inherent powers of an equity
court to fashion relief. Id.
The Fifth Circuit has also recognized that an evidentiary hearing is not
required on the Commission’s request to appoint a receiver where the record
discloses sufficient facts to warrant such an appointment. Bookout v. Atlas Fin.
Corp., 395 F. Supp. 1338, 1342 (N.D. Ga. 1974), aff’d, 514 F.2d 757 (5th Cir. 1975).
The Court may appoint a receiver on a prima facie showing of fraud and
mismanagement. See First Fin. Group, 645 F.2d at 438. Factors courts have
considered that indicate the need for a receivership include the following: “a valid
claim by the party seeking the appointment; the probability that fraudulent conduct
has occurred or will occur to frustrate that claim; imminent danger that property will
5
be concealed, lost, or diminished in value; inadequacy of legal remedies; lack of a
less drastic equitable remedy; and likelihood that appointing the receiver will do
more good than harm.” Santibanez v. Wier McMahon & Co., 105 F.3d 234, 242 (5th
Cir. 1997), quoting Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314,
316-17 (8th Cir. 1993).
IV. This Court Should Create a Receivership in this Case
Defendants do not dispute that they operated a Ponzi scheme that involved
hundreds of investors and close to a $100 million dollars. Indeed, Defendant Adams
has pled guilty to criminal charges of wire fraud and bank fraud based on the same
conduct. Thus, there is no dispute that fraudulent conduct occurred. It is in the
interest of justice, and to the benefit to the investors, to have a court-appointed
receiver to oversee the process of returning the remaining funds in as fair and
economical manner as possible. The appointment of a receiver will also prevent
investors from obtaining preferential treatment to Defendants assets by filing
individual lawsuits.
Moreover, in addition to the funds frozen in various accounts, there are a
number of illiquid assets at stake. Mr. Adams has invested in various real estate
projects. See Exhibit A (Letter from John M. Colette). These investments will likely
be included in the receivership estate because, among other things, Adams
presumably purchased or maintained some or all of those real estate projects with
6
investor funds. Indeed, Adams’ counsel has advised that almost $200,000 in
payments to various real estate investments are coming due, and that such payments
must be made to preserve Adams’ interest in those investments. Id. A receiver is
needed to determine whether maintaining those investments is in the best interest of
defrauded investors, particularly because the potential estate has minimal liquid
assets at the moment.
Accordingly, the Court should appoint a receiver over Defendants’ assets to
marshal Defendants’ assets, and preserve and maximize their value for the benefit of
the defrauded investors.
V. The SEC’s Receiver Recommendation
Generally, courts rely on the SEC to recommend a receiver to the court.
Anticipating that the Court may ask the Commission to recommend a potential
receiver here, the Commission sought three proposals from individuals who have
served as receivers in other SEC cases. If the Court prefers to rely on the
Commission’s recommendation rather than select its own receiver, the Commission
respectfully recommends that the Court appoint Kenneth D. Murena, Esq., of
Damian & Valori, LLP, in Miami, Florida, as the receiver in this matter. See Exhibit
C (Murena’s résumé and list of receivership cases). Mr. Murena has extensive
experience serving as a receiver, both in SEC matters and other civil contexts, and in
particular he is very familiar with this sort of fraud and the types of assets that the
7
Commission believes will compose the estate. While Mr. Murena is located in
Miami, he has committed that, if appointed, he will not bill the estate for expenses
incurred while traveling between Miami and Mississippi.
The Commission respectfully requests that this Court enter the proposed order
appointing Kenneth D. Murena as a temporary receiver over the Defendants’ assets.
VI. Conclusion
Based on the foregoing, the Commission respectfully requests that the Court
grant its motion and enter the proposed order appointing Kenneth D. Murena, Esq.,
of Damian & Valori LLP, as a temporary receiver over Defendants’ assets.
Dated this 10th day of May, 2018.
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Georgia Bar No. 529940
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
8
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
Assistant United States Attorney
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
9

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Memorandum of Law in Support of its Expedited Motion to Appoint
Receiver on John M. Colette, Esq., as counsel for Defendants, via email and by
United Parcel Service.

s/Kristi H. Johnson
Kristi H. Johnson

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

Defendants,
EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
Plaintiff Securities and Exchange Commission (“Commission”) files this
Expedited Motion for the Appointment of a Temporary Receiver for Defendants in
this matter. Due to the continued risk of dissipation of those assets, the Commission
asks that the motion be heard as expeditiously as the Court’s schedule permits.
In support of its motion, the SEC contemporaneously files a memorandum
brief and the following supportive exhibits:
Exhibit A: Letter from John M. Colette
Exhibit B: Individual Investor Lawsuit

Exhibit C: Murena’s résumé and list of receivership cases
As set forth in the Complaint, the Commission alleges that Defendants
defrauded numerous investors via a Ponzi scheme. While Defendants have not yet
responded to the Complaint, Defendants’ counsel has indicated that Defendants do
not contest the core allegation that they conducted a Ponzi scheme. Indeed, during
the change of plea hearing on May 9, 2018 in United States v. Adams, No. 3:18-CR-
88-CWR-LRA (S.D.Miss.), Defendant Adams pled guilty to the Bill of Information
filed against him for bank and wire fraud based on the same conduct.
Under these circumstances, a receiver is necessary to take control of the
Defendants’ assets for the benefit of investors in order to marshal and preserve those
assets. The primary purpose of equity receiverships in an SEC action is to promote
orderly and efficient administration of the estate by the district court for the benefit of
investors. SEC v. Hardy, 803 F.2d 1034, 1038 (9th Cir. 1986). “The appointment of
a receiver is a well-established equitable remedy available to the SEC in its civil
enforcement proceedings for injunctive relief.” SEC v. First Fin. Group of Texas,
645 F.2d 429, 438 (5th Cir. 1981). Moreover, because the Commission remains
concerned about the potential for dissipation of investor funds and assets, the
Commission requests that this motion be heard on an expedited basis.
Based on common law principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
2
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. In this case, the Commission anticipates the receiver ultimately
distributing the estate assets back to defrauded investors.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors.
The Commission seeks the appointment of a temporary receiver who will,
within 60 days, file a report that includes a preliminary plan for the administration of
the receivership estate, including recommendations as to the most efficient means for
marshalling, liquidating and distributing assets within that estate. The Court, with
input from the Commission, can then better determine whether the receivership
should be continued.
The Commission, therefore, respectfully asks that the Court enter an order in
the form filed concurrently herewith appointing a temporary receiver in this case.
3
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
4
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
5

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Expedited Motion to Appoint Temporary Receiver on John M. Colette,
Esq., as counsel for Defendants, via email and by United Parcel Service.
s/Kristi H. Johnson
Kristi H. Johnson
EXHIBIT
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Case 3:18-cv-00252-CWR-FKB Document 179 Filed 08/23/19 Page 1 of 18

UNITED STATES DISTRICT COURT

SECURITIES AND EXCHANGE No: 3:18-cv-252

ARTHUR LAMAR ADAMS AND

August 23, 2019

/s/ Alysson Mills

Recent filings or events—criminal

United States v. Adams, No. 3:18-cr-88

United States v. McHenry, No. 3:19-cr-20

Recent filings or events—civil

Securities & Exchange Commission v. Adams, et al., No. 3:18-cv-252

Proposed settlement—First National Bank of Clarksdale: On August 20, 2019, I submitted

The proposed order approving settlement includes a channeling injunction, sometimes

Proposed settlement—Patrick Sands: On August 23, 2019, I submitted to the Court a

Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679

 $325,000 in cash currently sitting bank accounts and

 his 5% interest in Oxford Springs.

In addition, Billings shall, among other things:

Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866

Alysson Mills v. BankPlus, et al., No. 3:19-cv-196

Jason Cowgill: Cowgill, a former manager of BankPlus’s Southaven, Mississippi branch,

Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364

I will respond to all defendants’ motions to dismiss or other responsive pleadings on or

Securities & Exchange Commission v. Kelly, et al., No. 3:19-cv-585

 permanently restraining and enjoining him from further violations of federal

 disgorging his ill-gotten gains, in an amount to be determined; and

 ordering that he pay civil penalties, in an amount to be determined.

Receiver’s actions in the past 60 days

Since I filed my last report on June 17, 2019, I have:

Continued to litigate Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679

Continued to litigate Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866

As summarized above, I previously filed oppositions to the Butler Snow defendants’

Continued to litigate Alysson Mills v. BankPlus, et al., No. 3:19-cv-196

As summarized above, I previously filed oppositions to the motions to dismiss filed by

As summarized above, I previously filed a complaint and an amended complaint against

Continued to account for “commissions” and gifts

Operation Grace World Ministries: As summarized above, Operations Grace World

Continued to review records

Worked with LLCs of which Adams was a member

As summarized above, we negotiated a proposed settlement with FNBC whereby it agrees

Conferred with federal and state authorities

Communicated with investors in Madison Timber

Interviewed persons with knowledge

I have continued to interview individuals with first-hand knowledge of matters bearing on

Researched legal claims against third parties

Receiver’s plan for the next 60 days

Continue to litigate Alysson Mills v. Michael D. Billings, et al., No. 3:18-cv-679

Continue to litigate Alysson Mills v. Butler Snow, et al., No. 3:18-cv-866

Continue to litigate Alysson Mills v. BankPlus, et al., No. 3:19-cv-196

As noted above, I expect to file oppositions to motions dismiss or other responsive

Continue to account for “commissions” and gifts

Monetize Adams’s interests in the remaining three LLCs

File additional lawsuits

Continue communicating with investors

Summary of status of assets

are the lawsuits it has filed or intends to file.

The current status of the Receivership Estate’s assets is as follows:

Receivership Estate’s account at Hancock Bank current balance $5,965,531.08

Alysson Mills vs. Michael D. Billings, et al., No. 3:18-cv-679

judgment against McHenry:

Alysson Mills vs. Butler Snow, et al., No. 3:18-cv-866

Alysson Mills vs. BankPlus, et al., No. 3:19-cv-196

Alysson Mills v. The UPS Store, Inc., et al., No. 3:19-cv-364

Settlement—Wayne Kelly received $1,384,435.17