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Press Release

Canton Man Charged as Part of Largest Ponzi Scheme in Mississippi History

For Immediate Release
U.S. Attorney's Office, Southern District of Mississippi
Fraud Affected Hundreds of Victims Across Multiple States

Jackson, Miss. – William B. McHenry, 71, of Canton, has been indicted by a federal grand jury for his role in a multi-million dollar Ponzi scheme that adversely affected hundreds of victims across multiple states over a number of years, announced U.S. Attorney Mike Hurst and Special Agent in Charge Christopher Freeze with the Federal Bureau of Investigation in Mississippi.

McHenry appeared before U.S. Magistrate Judge Linda R. Anderson today for his initial appearance and arraignment on the Indictment. The case is currently scheduled for trial on April 15, 2019, before U.S. District Judge Carlton W. Reeves in Jackson.

"Those who prey upon and steal from others will soon find themselves on the wrong side of the law. We will continue to investigate this massive scheme wherever the evidence may take us and will vigorously pursue and bring to justice any other wrongdoers who were involved," said U.S. Attorney Hurst.

McHenry is charged with one count of securities fraud and two counts of wire fraud involving a scheme to defraud investors, all in connection with a Ponzi scheme using Madison Timber Properties, LLC, a company wholly owned by Arthur Lamar Adams. Adams has previously been convicted and sentenced for his role in the Ponzi scheme.

As charged in the Indictment, beginning as early as 2008 and continuing through April 2018, McHenry assisted in a scheme to defraud investors by soliciting millions of dollars of funds for Adams under false pretenses, failing to use the investors’ funds as promised, and converting investors’ funds to McHenry’s and Adams’s own benefit without the knowledge of the investors. Instead of investing McHenry’s clients’ money, Adams used the invested funds for

his own personal benefit and for purposes other than those represented to investors, which also included making payments due and owing to other investors, thus perpetuating the Ponzi scheme. During the fraudulent scheme, McHenry recruited investors, and fraudulently obtained well in excess of $18,000,000 from more than 25 investors located in multiple states.

As alleged in the Indictment, as part of the fraudulent scheme, McHenry falsely represented to investors that Madison Timber Properties was in the business of buying timber rights from landowners and then selling the timber rights to lumber mills at a higher price. The object of the scheme was to cause individuals to invest in loans that purportedly were for the purpose of financing contracts for the purchase of timber rights to be sold to lumber mills at a higher price. However, neither McHenry, Adams nor Madison Timber Properties had such timber rights or contracts with lumber mills, except in only a few instances.

McHenry and Adams entered into fraudulent investment contracts with investors, most often in the form of promissory notes on behalf of Madison Timber Properties. The loans typically guaranteed investors an interest rate of 12-13%, with the interest to be repaid to investors over the course of 12-13 months. The monthly payments due on these promissory notes were typically due on either the first or the fifteenth of the month.

McHenry and Adams created false documents causing investors to believe that their investments were secured by sufficient collateral from which they could recover all or part of their investment in the event that Madison Timber Properties defaulted on the loans. Specifically, Adams created false timber deeds purporting to be contracts conveying timber rights from landowners to Madison Timber Properties. Adams forged the signatures of landowners and also created false timber deeds purporting to convey timber rights from Madison Timber Properties to the investors.

To further lull investors, Adams had many of the documents notarized to make the investments appear legitimate. McHenry and Adams also required the investors to agree not to record their timber deeds unless Madison Timber Properties defaulted on the loan agreement by failing to make a payment.

McHenry misled his investors to think that McHenry was a principal officer of Madison Timber Properties and was personally invested with his own funds in the enterprise. Instead, McHenry in fact only received a ten percent commission on all the investments he recruited, which McHenry failed to disclose.

Following the 2018 criminal prosecution of Arthur Lamar Adams, the United States District Court appointed a receiver, who is actively seeking to recover and maximize assets for restitution to investor victims. Information regarding the Receiver’s activities can be found at the receiver’s website,

The case is being investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. The criminal case is being prosecuted by Assistant United States Attorney Theodore Cooperstein.

The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.

Updated March 1, 2019

Securities, Commodities, & Investment Fraud