MONTEREY, Calif. (KION) A Monterey-based attorney is facing a wire fraud charge following accusations that he fraudulently obtained loans that involved a trust he administered and its San Francisco property, according to U.S. Attorney David Anderson and FBI special agent in charge John Bennett.
A complaint was filed against John Arthur Hudson, also known as Art Hudson and J.A. Hudson, on June 9. According to the complaint, Hudson was based in Monterey County and was appointed to be the trustee of a trust in 2011. The trust owned a commercial property in San Francisco and received rental income from its tenant, The Elite Cafe.
Hudson is accused of defrauding the property owner of hundreds of thousands of dollars. The complaint says that between April 2011 and June 2018, he took out at least $680,000 in loans as trustee, using the property as security. He allegedly said the loan proceeds would be used to improve the property, but did not use any of it to improve the property. According to the complaint, the loan proceeds were traced to unrelated legal settlement payments, personal mortgage and credit card payments, checks payable to Hudson and other personal expenses.
The complaint says Hudson got the loans without the trust's beneficiaries knowing about or authorizing them, without telling them and while misrepresenting the trust's finances. When the trust sold the property in early 2019, more than $600,000 of the proceeds apparently were dedicated to paying off the loans taken out by Hudson instead of going to the beneficiaries.
If convicted of wire fraud, Hudson could face a maximum of 20 years in prison, three years of supervised release and a $250,000 fine or twice the gross gain or loss.