United States Attorney Rebecca A. Gregory
Eastern District of Texas
FOR IMMEDIATE RELEASE CONTACT: DAVILYN WALSTON
FRIDAY, MARCH 13, 2009 PUBLIC INFORMATION OFFICER
WWW.USDOJ.GOV/USAO/txe PHONE: (409) 839-2538 CELL: (409) 553-9881
NACOGDOCHES MAN SENTENCED FOR EMBEZZLING FROM INVESTORS
Ordered to pay over $70 million in Restitution
BEAUMONT, TX – U.S. Attorney Rebecca A. Gregory announced today that a 57-year-old Nacogdoches man has been sentenced for perpetrating a commodities Ponzi scheme in the Eastern District of Texas.
GEORGE D. HUDGINS pleaded guilty on Sept. 9, 2008, to wire fraud, embezzlement and money laundering and was sentenced to 121 months in federal prison today by U.S. District Judge Thad Heartfield. Hudgins was also ordered to pay restitution of $70,864,679.00 to his victims. Approximately 40% of that amount has already been collected through the efforts of the court appointed received and the investigative team, and will be repatriated to the victim investors.
According to information presented in court, from 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. Instead of operating at the significant profit levels stated by Hudgins, the pool lost large amounts of money. Hudgins actually used monies provided to him by investors to pay "profits" to other investors, thus executing what prosecutors describe as a Ponzi scheme. Hudgins also lived a luxurious lifestyle, purchasing among many items, several classic sports cars, parcels of real estate, two airplanes, and numerous pieces of expensive jewelry.
This case was investigated by the Federal Bureau of Investigation, the Texas Rangers, the Internal Revenue Service- Criminal Investigations Division, and the Commodity Futures Trading Commission and was prosecuted by Assistant U.S. Attorney Malcolm Bales.
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