LUBBOCK, TX (KCBD) - NewsChannel 11 continues to follow a developing story that affects dozens of local businesses and hundreds of local investors. The Securities and Exchange Commission just filed a complaint against Lubbock businessman Benny Judah.
He is the president and sole owner of Excel Financial Company. Authorities say Judah defrauded investors out of millions of dollars over the past three years. Now, all of his assets, including his local businesses, have been frozen. That means those businesses cannot operate, except under the supervision of a court appointed receiver.
The SEC filed the complaint late Tuesday. It says Judah sold false securities, telling people they were investing in one thing, when in fact they were funding others, including Judah's day trading and loans to himself and other businesses he controlled.
As of two days ago, according to court papers, Excel had issued $40-million worth of the fraudulent securities. Those are held by about 240 people, primarily folks here in the Lubbock area.
The complaint says Judah represented that he wanted to raise $50-million to fund his company's equipment-leasing business, Excel investments, and to retire previously issued notes. However, investigators say he lost at least $5-million in day trading and approximately $20-million more in loans to himself and other businesses.
Authorities say he also told investors that Excel was making a profit, when they really weren't. We checked, and technically Judah controls 78 Texas corporations. Some of those are redundant and some of them are no longer active, so he has a leadership position in approximately 50 Texas corporations.
You'll recognize some of those companies as The Falls Tennis and Athletic Center, Harrigans, Zoo-Kinis, Las Brisas, and several more. So, what does this announcement mean for them? Typically, those businesses will continue to operate until they're served by the court. Then, it's up to the receiver to decide what's next.
Local attorney Fernando Bustos has been named as the receiver. NewsChannel 11 left messages with him for comment, but he's not yet returned our calls.
We did however receive a statement from Judah through his attorney. It reads: "Benny Judah regrets his role in the events that have led to the SEC filings. His thoughts are with his many friends and investors who have stuck with him all these years. Benny further wants to assure everyone that he is fully cooperating with the SEC to maximize the return to his investors."
It's important to note this is a civil complaint. Right now, Judah does not face any criminal charges.
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