Judah admits to running Ponzi scheme, faces 25 years behind bars - KCBD NewsChannel 11 Lubbock

11/12/09

Judah admits to running Ponzi scheme, faces 25 years behind bars

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By Ann Wyatt Little  - bio | email

LUBBOCK, TX (KCBD) – The Lubbock businessman who admitted to swindling millions from his investors by convincing them they were pouring money into a healthy business investment pleaded guilty Thursday.

Nearly 300 victims and their families lost money in what prosecutors are now calling a substantial Ponzi scheme. Judah admitted that he lost $50,161,707.  Just because he pleaded guilty to two charges doesn't mean his 300 victims should expect to see their money anytime.

Judah had nothing to say before walking into the Mahon Federal Building Thursday for his hearing. The Lubbock businessman admitted to laundering money and selling unregistered securities. After a brush with the SEC in 2001 Judah continued to engage in fraudulent practices. He sent his victims fake balance sheets and loaned himself money without telling his clients.

“There are in excess of 250 victims nearly 300,” says Federal Prosecutor Dick Baker who adds that many will forever be impacted by Judah’s greed. “This is a substantial Ponzi scheme that involves $50 million. Based on my experience with Ponzi schemes the victims generally do not come out whole,” he added.

Judah was emotionless as U.S. Marshals took him into custody. He faces the maximum of 25 years in prison and a fine of $500,000. He confesses to losing nearly $50 million and agreed to pay more than $48 million in restitution as part of the plea negotiation. Receivers are working to find the missing money and track down all of his assets, but no one knows for sure what will be left after all is said and done.

Baker says when the bottom falls out of the economy Ponzi schemes tend to topple and more white-collar crimes are committed. “If it looks too good to be true then it probably is,” says Baker who urges investors to be careful.

NewsChannel 11 asked Judah after he pleaded guilty if he had anything to say to his victims, he had no comment. His attorneys did not want to comment either.

Judge Sam Cummings has ordered a pre-sentencing investigation. Judah will remain in the Dickens County Correctional Facility until the judge determines his sentence which will most likely take six weeks.

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Benny Judah Plea Agreement
Read the plea agreement in the Benny Judah criminal case. (Note: Document may take a few moments load. You will need Acrobat to open this file.)
Benny Judah Factual Resume
This is the factual resume detailing what Benny Judah admits to as part of the plea agreement. (Note: Document may take a few moments load. You will need Acrobat to open this file.)
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