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Press Release

Former Bardstown Chief Financial Officer Sentenced to 35 Months in Federal Prison for Embezzling City Funds

For Immediate Release
U.S. Attorney's Office, Western District of Kentucky

Louisville, KY – A former city official was sentenced yesterday to 35 months in prison and ordered to pay restitution for embezzling over three-quarters of a million dollars from the City of Bardstown, Kentucky, during her years working with the city.

United States Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge Jodi Cohen of the FBI’s Louisville Field Office, and Commissioner Phillip Burnett, Jr. of the Kentucky State Police made the announcement.

According to court documents and statements made in court, Tracy L. Hudson, 42, of Bloomfield, Kentucky, embezzled funds from the City of Bardstown, Kentucky, while employed first as the City’s Occupational Tax Administrator and then as its Chief Financial Officer. Between 2013 and September 2019, Hudson stole funds from the City of Bardstown by various means, including by taking cash from the City’s funds for her own personal use, paying herself for false expense reimbursements, diverting additional payments into her 401k pension plan in excess of the amount withheld from her wages, purchasing personal items on a City credit card without authorization, and crediting payments to her personal accounts with the City despite no actual payment having been made. The primary method by which Hudson stole from the City of Bardstown was by stealing cash, most often from cash payments made when individuals were paying for City services. Hudson also engaged in various activities which generated interstate wire communications to steal certain of the funds and to conceal her thefts from the City.

In addition to the 35-month prison sentence, Hudson was sentenced to a 3-year term of supervised release and ordered to pay $629,972.39 in restitution to the City of Bardstown and its insurance company.

The FBI and the Kentucky State Police investigated the case. 

Assistant U.S. Attorney Stephanie M. Zimdahl prosecuted the case.


Updated March 22, 2023