Two Jackson businessmen have been sentenced for their roles in defrauding investors in a timber investment scheme out of millions of dollars.
Attorney Jon D. Seawright, 51, and lobbyist Ted Brent Alexander, 58, are accused of forming a scheme to defraud investors by soliciting millions of dollars under false pretenses and by failing to use investor funds as promised.
They represented to investors that they were in the business of loaning funds to a “timber broker” to buy timber rights from landowners and then sell those rights to lumber mills at a higher price.
Alexander and Seawright promised investors a return of 10 percent or more over 12 or 13 months on each unit of invested capital.
They led their investors to believe that they were inspecting each tract of land and vetting each document, deed, and contract in support of their investments, causing investors to entrust that their investments were secured by valid assets.
The two men failed to inspect each property related to the timber rights underlying each investment and did not verify each executed lumber mill agreement related to each investment.
They made few or no such inquiries, and if they had made such inquiries, they would have discovered that the timber deeds, lumber mill agreements, and related documents had been falsified and were not valid.
Alexander and Seawright also represented to their investors that the two men would only profit from each series of investments if they performed as promised to the investors. This gave the investors the misleading impression that their interests were fully aligned with those of the subjects.
In addition to receiving a predetermined percentage of return on the investors’ funds, both men received undisclosed payments of approximately three percent for recruiting investments to the timber investment scheme immediately upon transferring the investment funds to the purported timber broker.
They did not disclose to the investors:
- The fact of these payments
- The amount of the payments in relation to the investments made
- The timing of the undisclosed payments to Alexander and Seawright before any repayment was made to the investors
Both men previously entered guilty pleas to conspiracy to commit wire fraud. Seawright is sentenced to serve 12 months and one day in prison, followed by two years of supervised release. Alexander is sentenced to serve five years of probation, which includes two years of home confinement with electronic monitoring.
The two are ordered to pay restitution joint and severally in the amount of $977,044.53. They were involved in a major $100 million Ponzi scheme started by Arthur Lamar Adams.
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