June 25, 2024

In a landmark decision, Jeffery L. Woods, a former businessman based in Chattanooga, has consented to reimburse over $30 million, pleading guilty to a Ponzi scheme. Woods is known as the de facto foreman of SouthEast Investment LLC, which drew in over $66 million from various investors between 2013 and 2019.

Woods claimed his company was buying real estate through various entities which were subsequently leased to health care providers. Despite his claims, funds collected from the investors were used to repay previous ones. Consequently, this inflated the rate of returns and gave the investors a false sense of security.

A lawsuit regarding the case was filed in Georgia in early 2019; however, it was relocated to Chattanooga’s federal court soon afterward. Perry H. Windle III, the bankruptcy trustee, assisted in facilitating the restitution arrangement.

“He [Windle III] has been wrestling this bear for a long time, and he was finally able to get it into a settlement,” stated Woods’ attorney, Rick Jahn Jr.

Jahn Jr. revealed that the agreed amount will cover all losses sustained by Woods’ investors. However, the details of how the repayment will be carried out remain undisclosed.

Woods filed bankruptcy under chapter 11 in June 2020 when his company suppressed the truth prompted by the filing of the lawsuit. His estate had only $2.5 million in assets at the time and debts worth tens of millions of dollars. Jahn Jr. mentioned that the settlement workout was apt as it averaged two cents on the dollar.

The restitution agreement, which had been in the works for nearly two years, was formally confirmed by Judge John Cook in Chattanooga on Tuesday.

The _Chattanooga Times Free Press_ obtained court documents revealing that Woods had personally admitted to misleading the investors. According to the documents, Woods signed a consent order on March 18, acknowledging several violations of federal securities acts. He had been charged by the US Securities and Exchange Commission (SEC) for defrauding approximately 400 investors across several states.

Frequently Asked Questions

What is SouthEast Investment LLC?

SouthEast Investment LLC is the company owned by Jeffery L. Woods which was involved in a fraudulent Ponzi scheme between 2013 and 2019. Woods used the company to solicit funds from investors under the pretense of real estate purchases and leases to healthcare providers.

What is the extent of the restitution agreement?

Jeffery L. Woods has agreed to reimburse over $30 million to cover all the losses of his investors. The exact details surrounding the repayment process are yet to be disclosed.

What charges does Woods face?

Woods has been charged by the US Securities and Exchange Commission for violating several federal securities acts. He admitted to misleading investors and running a fraudulent scheme through his company.