Washington D.C., August 22, 2019 - The Securities and Exchange Commission today announced charges against a Mississippi company and its principal for their role in selling promissory notes in connection with the previously charged Madison Timber Properties, LLC Ponzi Scheme.

The SEC's complaint, filed in federal court in Jackson, Mississippi, alleges that Terry Wayne Kelly, Jr., of Madison, Mississippi, through his wholly-owned entity, Kelly Management, LLC, provided false information to investors by telling them that their money would be used by Madison Timber to secure and harvest timber and promising annual returns of 12 to 15 percent. In truth, the complaint alleges, Madison Timber never obtained any harvesting rights; instead, Madison Timber's principal, Arthur Lamar Adams, forged deeds and cutting agreements and used investors' money for personal expenses and to develop an unrelated real estate project. According to the complaint, Kelly continued to provide the false information to investors, even after a financial institution confronted Kelly and Adam with questions about Madison Timber's business practices.

The SEC's complaint charges defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges defendants with violating the registration provisions of Sections 5(a) and (c) of the Securities Act and Section 15(a) of the Securities Exchange Act.

Defendants have agreed to settle the charges and have consented to the entry of permanent injunctions. The court will determine the amount of disgorgement, prejudgment interest, and civil money penalties to be paid by defendants at a later date.

Previously, the court overseeing the SEC's ongoing litigation against Madison Timber and Adams appointed a receiver. The receiver has established a website, which contains information on the receiver's progress and on any relevant federal or state proceedings.

The SEC's continuing investigation is being conducted by Krysta Cannon and Justin Delfino of the SEC's Atlanta Regional Office and is being supervised by Peter Diskin. The SEC's litigation will be led by Shawn Murnahan and supervised by Graham Loomis. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Mississippi and the Federal Bureau of Investigation.