US law firm must face trial tied to investor scheme, judge rules

By Mike Scarcella

March 4 (Reuters) - A federal judge in Mississippi ruled that U.S. law firm Baker Donelson is potentially liable for the alleged role of two of its former employees in a multimillion-dollar investment fraud scheme, setting up the case for a trial in federal court.

In a ruling on Tuesday, U.S. District Judge Carlton Reeves in Jackson mostly rejected the law firm's bid to end the case before a trial on the merits.

Reeves said key issues — including a civil conspiracy claim against the 700‑lawyer firm — must be decided at trial because there are enough facts in dispute.

Baker Donelson and its lawyers did not immediately respond to requests for comment. The firm has denied any wrongdoing.

The ruling came in a lawsuit brought by court‑appointed receiver Alysson Mills, who is overseeing efforts to repay victims of an alleged fraud involving a purported timber broker at a sham company who prosecutors said lied about an investment enterprise that drew hundreds of millions of dollars.

Lamar Adams, the scheme’s alleged leader, was sentenced to more than 19 years in prison in 2019, and his victims lost about $85 million, court records show.

Mills alleges Baker Donelson is liable for conduct by its former Jackson‑office partner Jon Seawright and senior policy adviser Brent Alexander. The pair launched a fund that pooled investor money for Adams’ company Madison Timber.

Reeves found a jury must decide disputes including whether Seawright and Alexander acted within the scope of their employment when they used firm offices, resources and staff while soliciting investors and working with Adams.

Seawright, a transactional partner and former board member at Baker Donelson, and Alexander pleaded guilty to conspiracy to commit wire fraud in connection with the Madison Timber scheme. In 2023, Seawright was sentenced to 12 months in prison and Alexander received five years of probation.

Baker Donelson told Reeves that Alexander and Seawright had no knowledge of Adams’ fraud before he confessed to authorities.

Reeves said the firm could face punitive damages in the case depending on how the evidence develops.

The case is Mills v Baker Donelson, U.S. District Court, Western District of Mississippi, No. 3:18-CV-866.

For Mills: Brent Barriere of Fishman Haygood; and Lilli Evans Bass of Brown, Bass & Jeter

For Baker Donelson: Craig Singer of Williams & Connolly