Former Myrtle Beach lawyer facing criminal charges over investment scheme

07/23/2014 11:32 PM

03/14/2015 2:11 AM

A former lawyer at one of South Carolina’s largest law firms is facing five felony charges for his alleged role in an investment scheme that promised interest rates of up to 4,900 percent through trades in the overseas bond market.

Mark McAdams – formerly with the McNair Law Firm in Myrtle Beach and a founder of the Global Holdings investment firm – was indicted last month along with two other men in the alleged scheme, which prosecutors say cost investors $3.5 million.

Also charged are Global Holdings co-founder Robert Dane Freeman, a former N.C. investment advisor, and Charles Lowell Walker, who helped recruit investors.

McAdams and Walker have pleaded not guilty and are free on $25,000 unsecured bonds pending further court action. Freeman has not yet been arraigned.

An indictment charges all three men with three counts of wire fraud, one count of conspiracy to commit wire fraud and one count of international money laundering. The charges carry combined maximum prison sentences of 140 years for each man.

The criminal charges follow a pair of civil actions, including one by the U.S. Securities and Exchange Commission in which McAdams and Freeman were ordered last year to pay back $4.3 million taken from investors, including interest, plus a combined $240,000 in civil penalties. The S.C. Attorney General’s office previously issued a cease-and-desist order against the men for securities violations.

The criminal case appears to mirror the SEC’s investigation, in which the federal government obtained default judgments against McAdams and Freeman.

According to the SEC, McAdams and Freeman solicited $3.5 million from investors in their Global Holdings company during the first nine months of 2008. McAdams and Freeman told investors that Global Holdings could offer triple-digit or better short-term returns because the company bought bonds directly from issuers at a discount and then quickly resold them for a profit.

Most investors never received any profits or the return of their money, according to prosecutors. Instead, McAdams, Freeman and Walker used the money for personal expenses.

The federal government also alleges that McAdams used his position at the McNair Law Firm to identify wealthy victims and give the scheme credibility by using the firm’s letterhead and email system to communicate with Global Holdings investors.

McAdams, who was a shareholder at the law firm, resigned from the firm in August 2008 and Global Holdings was dissolved in October 2008.

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