United States Attorney Rebecca A. Gregory
Eastern District of Texas
FOR IMMEDIATE RELEASE CONTACT: DAVILYN WALSTON
FRIDAY, JULY 25, 2008 PUBLIC INFORMATION OFFICER
WWW.USDOJ.GOV/USAO/txe PHONE: (409) 839-2538 CELL: (409) 553-9881
NACOGDOCHES MAN CHARGED WITH PERPETRATING
COMMODITIES PONZI SCHEME
LUFKIN, TX—United States Attorney Rebecca A. Gregory announced today the filing of an Information charging a 57-year-old Nacogdoches man with three counts of criminal conduct relating to his operation of a commodity trading pool in the Eastern District of Texas.
GEORGE D. HUDGINS was charged with one count of wire fraud, one count of embezzlement from investors in his commodity pool, and one count of money laundering. He was in court today for an Initial Appearance before United States Magistrate Judge Earl S. Hines.
According to the information in the charging instrument, beginning in 2004, through April 2008, Hudgins solicited and accepted funds from numerous investors for the purpose of investing in commodities futures and stock index futures. To encourage investment, Hudgins provided investors with false and misleading information concerning the pool's historic returns. The Information alleges that instead of operating at the significant profit levels stated by Hudgins, the pool lost large amounts of money. The Information also charges that Hudgins actually used monies provided to him by investors to pay "profits" to other investors, thus executing what prosecutors describe as a Ponzi scheme. Count II, the embezzlement charge, charges a violation of the Commodity Exchange Act. Both Count II and Count III, the money laundering count, refer to accusations concerning what happened to the money entrusted to Hudgins by the investors.
If convicted, Hudgins faces up to 20 years in federal prison and a fine of up to $250,000.00.
This case is being investigated by the FBI, the Texas Rangers, the IRS and is being prosecuted by Assistant United States Attorney Malcolm Bales who is working closely with attorneys from the Commodity Futures Trading Commission.
It is important to note that an information should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
back to top