Former SEC Counsel Charged With Wire Fraud

     ALBUQUERQUE (CN) – A former senior counsel in the SEC’s enforcement division was indicted Thursday on seven counts of wire fraud, the U.S. Attorney’s Office said.
     Daryl Hudson III, 59, of Washington, D.C., pleaded not guilty. If convicted, he faces up to 30 years in prison and up to a $1 million fine on each charge.
     Hudson was chairman and CEO of Hampden Kent Group LLC, a Washington, D.C.-based project finance and development company that touted its ability to secure debt funding for green energy start-up businesses.
     According to the indictment, Hudson schemed to rip off Santa Fe-based Bluenergy Solarwind Inc., which was seeking $80 million in debt funding for new solar wind turbines.
     Prosecutors said Hudson misrepresented that, upon signing a service agreement, his company would issue a loan commitment supported by $500 million in treasuries that BSI could use to help obtain customer orders and equity funding.
     BSI and Hudson eventually entered into a service agreement in which BSI would pay approximately $80,000 of a retainer fee by July 20 and would pay another $70,000 within 30 days. When funding was secure, BSI would pay another $150,000 for a total fee of $300,000, prosecutors said.
     After $85,000 was wired to HKG, Hudson allegedly transmitted a loan commitment document and a safekeeping receipt to BSI. But prosecutors said the latter document was fraudulent.
     Also part of the scheme was the souring of the business relationship between the two, that Hudson would express frustration over BSI’s supposed failure to produce sufficient letters of credit and customer information, according to the indictment.
     Within weeks, BSI sought to terminate the relationship and offered Hudson $25,000 while returning the remaining $60,000.
     “Hudson abruptly refused this request and hung up,” the indictment states.
     After BSI confirmed the receipt was a fraud and demanded return of the $85,000, HKG accused BSI of being in breach of contract by misusing the receipt and sought $965,000 in damages, according to the indictment.
     Hudson was released pending trial.
     He was with the SEC from 1982 to 1985 and graduated from the Georgetown University Law Center in 1979, according to the indictment.

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