A pair of Pillow Academy sports stars from the early 1990s, along with the mother of one of the men, have been named in federal complaints for their alleged roles in a failed Ponzi scheme that swindled at least 300 people out of more than $100 million.
Wayne Kelly and Stewart Patridge were standout football players for the Mustangs, Kelly as a wide receiver and Patridge as the quarterback. They were both all-conference in 1991. Kelly also pitched for the baseball team and was a leader on the basketball team.
After graduation, both went to Mississippi Delta Community College, a year apart. Kelly made the 1992 junior college all-state team, and Patridge led MDCC to a 12-0 record and the national junior college championship the following season.
Patridge transferred to Ole Miss and started at quarterback from 1995 to 1997. He won numerous awards during his senior season in 1997, including the Conerly Trophy for the top college player in the state.
Gee Gee Patridge of Madison is his mother and executive vice president and chief operations officer of BankPlus.
In October, Arthur Lamar Adams of Madison was sentenced in federal court in Jackson to 235 months in prison after pleading guilty and admitting to prosecutors that he had engineered a Ponzi scheme through a company called Madison Timber.
Prosecutors allege that Adams and his agents sold investors phony interests in Madison Timber, a company they were told was buying timber from Mississippi landowners and selling it to Mississippi lumber mills at a higher price. Prosecutors say the transactions were fake, but promises of high returns drew numerous investors from North Mississippi, including U.S. Sen. Roger Wicker.
Alysson Mills, a receiver appointed by a federal judge last June in an attempt to claw back some of the investors’ money, filed suit last year against Kelly and his company Kelly Management, claiming he had received $9.7 million in the scheme and paid out $1.5 million in commissions to sub-recruiters. The complaint was settled in December for $2 million.
In another claim, filed on March 20 against Stewart Patridge, Gee Gee Patridge, BankPlus and others, Mills claims they “substantially assisted Madison Timber’s growth” by lending their influence and professional services and directing their banking customers to the scheme.
“Because defendants contributed to the success of the Madison Timber Ponzi scheme, they are liable to the debts of the Receivership Estate to investors,” the suit states.
“Stewart was a childhood friend and college roommate of Wayne Kelly,” according to the suit. “... Kelly began working for Madison Timber as early as 2010. Madison Timber paid Kelly and his company, Kelly Management, a commission for each investment made by an investor that Kelly recruited. Kelly had check-signing authority for Madison Timber and was sometimes held out as its vice president. He engaged his own friends to ‘sub-recruit’ for Madison Timber and paid them a percentage of his own commissions.”
The suit claims Kelly introduced Gee Gee and Stewart Patridge to Adams and Madison Timber no later than January 2011. Gee Gee became an investor and continued to invest through 2014 and received payments until July 2015. In a Ponzi scheme, early investors are paid through the proceeds of newly recruited investors.
The suit also claims Stewart Patridge saw Madison Timber as “a money-making opportunity for himself.” He recruited customers, the suit alleges, and Kelly agreed to pay him a 2 percent commission on each dollar invested.
The complaint alleges that Stewart Patridge was paid $141,940 in commissions in 2013 and 2014.
The suit claims Gee Gee Patridge used her influence at BankPlus, and even the bank facility itself, to recruit bigger investors in Jackson. It claims she was in constant contact with Kelly and recruited investors even after she had stopped investing herself and until the scheme collapsed on April 19, 2018.
The complaint claims that neither Stewart Patridge, Gee Gee Patridge, nor others who recruited investors to Madison Timber did anything to independently confirm that the timber underlying the investments was real, although evidence of the fraud was easily obtainable.
The suit also claims that despite people inside BankPlus expressing suspicions about Madison Timber as “a pyramid scheme” that had been “kiting checks” between banks, and in fact reporting those suspicions to federal authorities in 2015, BankPlus continued to allow Madison Timber to use the bank for financial transactions.
In a statement to the news blogger Jackson Jambalaya, BankPlus said that it “works vigorously to comply with all laws and regulations. We deny any allegations of wrongdoing and look forward to presenting all of the facts in the appropriate forum. The vast majority of allegations revolve around incidents several years ago and there is no allegation that BankPlus received any financial benefit from the actions of a small group of employees several years ago.”
Mills’ complaint also states that most of the investors recruited into the scheme were not wealthy or sophisticated. It details the experience of one “senior citizen” introduced to Madison Timber by Stewart Patridge when he worked at BankPlus in Southaven in 2012.
The woman entrusted all of her money, which she had received following the deaths of four of her children, to Patridge and Madison Timber. When the scheme collapsed, she lost it all and had to sell her house and move in with her daughter so she could continue to cover her medical expenses.
• Contact Gavin Maliska at 581-7235 or firstname.lastname@example.org.
The original version of this article had Gee Gee Patridge's title with BankPlus incorrect.