Almost 30 years ago, quarterback Stewart Patridge was filling the air with footballs around Pillow Academy’s stadium en route to setting career passing records that still stand today at the school.
The person often on the receiving end of the more than 260 passes that Patridge completed was Wayne Kelly.
It’s one of the interesting but sad twists of the Madison Timber Ponzi scheme that the former teammates and longtime friends would hook up again decades later, but this time in an inglorious way.
According to complaints filed by the court-appointed attorney who is trying to recover tens of millions of dollars from those who benefitted from Mississippi’s largest ever Ponzi scheme, Kelly recruited Patridge to help him line up investors for a sham company that promised anywhere from 12 to 20 percent annual returns on timber deals.
Kelly, who now lives in Madison, was one of Arthur Lamar Adams’ top producers, allegedly earning almost $10 million in gross commissions over an eight-year period, of which almost $1.5 million Kelly paid out to other “sub-recruiters,” including Patridge.
Patridge was a star everywhere he played, leading Mississippi Delta Community College to a national championship, then transferring to Ole Miss, where he would earn accolades as the state’s top college football player in 1997. As a businessman, however, he was a mixed bag, according to the lawsuit filed March 20 against him, his mother, Gee Gee, the bank for which she’s an officer, BankPlus, and other defendants.
For his Madison Timber sideline, Stewart Patridge concentrated on investors in the DeSoto County area, where he worked first for BankPlus, then later for Mutual of Omaha. He did well enough in sales that he received at least $141,940 in commissions from Kelly over a two-year period. Patridge’s lack of attention to detail, though, reportedly created a rift between the two.
To keep the Ponzi scheme from collapsing, it required a lot of money and paperwork to flow back and forth and on time. New investors’ money had to be quickly wired to Madison Timber’s bank account to cover the post-dated checks cut to older investors. Patridge would be tardy, the complaint says, in getting his new investors’ money to Madison Timber and premature in depositing the checks for his earlier clients.
Frustrated, Kelly turned to Gee Gee Patridge for help and took steps to cut his friend out of the loop, the complaint says.
“Eventually Kelly grew wary of paying Stewart any commissions at all. In July 2014 Kelly wrote Gee Gee that ‘I will make the check out to you or [Stewart’s father] ... You guys can give it to Stewart or whatever you want to do with it. I am not going to even try to deal with him.’”
The complaint is one side of a legal argument, and it doesn’t make any accusations of criminal behavior. That’s not the receiver’s role. Hers is just to get whatever money she can to help offset the $85 million in principal (not counting the promised interest) that more than 300 investors have lost.
The first to fork up was Kelly, who settled with Mills late last year for $2 million. His apparent willingness to cooperate may spare him prosecution.
To date, only Adams and one other of his closest associates, Bill McHenry, have been charged with criminal conduct. Adams is serving a nearly 20-year prison sentence after pleading guilty last year, and McHenry is awaiting trial.
All the other dozen or so players who have been named are accused of civil misdeeds only — namely that they should have realized that Adams was perpetrating a grand fraud, that he was using them and the prestige of some of the institutions with which they were associated to give the scheme an air of legitimacy with potential investors, and that some of them hugely profited in the scam, even if they were ignorant of its criminal design.
They should have known better.
Some of the victims should have, too. Madison Timber, as with all Ponzi schemes, preyed on human greed. It promised a safe investment but with a rate of return equal to high-risk ventures, and hundreds bought into the fairy tale. The rich fell for it — one early investor in New Orleans kicked in $1.5 million — and so did the not-so-rich. Although initially Madison Timber set a $100,000 floor to get in, it would eventually drop that minimum requirement to as low as $25,000, reportedly snagging some who would wind up losing their entire life’s savings.
Although Mills is working diligently to try to recover what she can, she’s got a long road ahead of her. As of her last reporting about six weeks ago, she had $3.8 million in the bank — less than 5 percent of the investors’ stolen principal.
When the duo of Patridge and Kelly were high school heroes, it would not have surprised many that they would make a name for themselves in the adult world, too. This wasn’t, though, the type of fame that would have been predicted.
• Contact Tim Kalich at 581-7243 or email@example.com.