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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Tuesday, June 16, 2020

Monterey-Based Attorney Charged With Wire Fraud

Defendant Allegedly Defrauded the Property Owner of the Home of The Elite Cafe Out Of Hundreds of Thousands of Dollars

SAN FRANCISCO – John Arthur Hudson, an attorney also known as Art Hudson and J.A. Hudson, was charged in a criminal complaint unsealed yesterday with wire fraud in connection with a scheme to fraudulently obtain loans involving a trust that he administered and the trust’s San Francisco property, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. 

According to the complaint filed June 9, 2020, Hudson, 70, was an attorney based in Monterey County who was appointed to be trustee of a trust in 2011.  The trust owned a commercial property on Fillmore Street in San Francisco and received rental income from its tenant, The Elite Cafe, a New Orleans-inspired restaurant. 

As evidence of wire fraud, the complaint alleges that between April 2011 and June 2018, Hudson took out at least $680,000 in loans as trustee of the trust, pledging the property on Fillmore Street as security and falsely representing that the loan proceeds would be used to improve the property.  Hudson instead personally profited from the loan proceeds and did not use any of the money to improve the property, as alleged in the complaint.  For example, the complaint describes how loan proceeds were traced to Hudson’s unrelated legal settlement payments, personal mortgage and credit card payments, checks payable to Hudson, and other personal expenses. 

The complaint alleges that Hudson obtained the loans without the authorization or knowledge of the trust’s beneficiaries, and without disclosing the loans to them, all while misrepresenting the trust’s finances.  According to the complaint, when the trust sold the property in early 2019, more than $600,000 of the proceeds went to pay off the loans obtained by Hudson rather than the beneficiaries of the trust.

Hudson is charged with wire fraud, in violation of 18 U.S.C. § 1343.  If convicted, Hudson faces a statutory maximum of 20 years in prison, three years of supervised release, and a $250,000 fine or twice the gross gain or gross loss.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Hudson made his initial appearance before U.S. Magistrate Judge Laurel Beeler yesterday, and he is currently released on a $500,000 bond. Hudson’s next court appearance is scheduled for June 22, 2020 before Judge Beeler for a bail review hearing. 

The case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office.  The case is being investigated by the FBI.

Topic(s): 
Financial Fraud
Updated June 17, 2020