JACKSON — A Mississippi man was sentenced on Tuesday to nearly 20 years in federal prison after he pleaded guilty to running a Ponzi scheme in which investors lost more than $85 million.
U.S. District Judge Carlton Reeves sentenced Arthur Lamar Adams on wire fraud charges in Jackson following a two-day hearing. Adams pleaded guilty in May after deciding not to fight the charges.
You hurt a lot of innocent people,” Reeves told Adams. “Many of these victims incurred a substantial hardship.”
Adams remains under house arrest and was ordered to report to prison in January.
Reeves ordered Adams to pay restitution for the losses, but that amount will be decided later. A receiver is trying to round up assets for defrauded investors, but it appears doubtful she will identify enough to fully repay them. She’s currently suing salesmen to whom Adams paid millions in commissions, seeking return of that money.
Adams and salesmen sold bogus timber rights, promising interest rates of 12 percent or more. In reality, though, Adams was using new money to pay off old investors.
More than 250 investors in at least 14 states lost money, prosecutors have said. They argued during the sentencing hearing that at least 34 investors sustained “substantial financial hardship.” The minimum investment was generally $10,000, but some invested much more.
Disabled veteran Eric Orth of Canton, who used a walker to make his way before the judge, said Adams’ Ponzi scheme left his family almost destitute. “It left me in a terrible position,” the 49-year-old testified according to the Clarion Ledger. “It took most of what I had.”
“Between my parents and myself we lost $1.2 million,” Orth said.
Among other investors who were defrauded was U.S. Sen. Roger Wicker, the Mississippi Republican.
Kim Mitchell, an auditor who works for prosecutors, testified that Adams diverted millions to himself just in the last year of the scheme, using the money to make payments on his house and other properties, pay credit card bills that averaged nearly $13,000 a month, and withdraw nearly $50,000 in cash.
Reeves rejected arguments by defense attorney John Collette that probation officials had overestimated how much investors lost in the scam. Collette argued that Adams should get credit for earlier interest payments to investors, reducing the amount of money they had lost.
“How much money someone made in the life of a Ponzi scheme over what they invested is not one of the considerations,” Assistant U.S. Attorney Dave Fulcher told Reeves.
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