BATON ROUGE, LA (WAFB) - A man pleaded guilty in federal court Thursday to multiple counts of mail fraud in a scheme that defrauded investors out of millions of dollars, according to court officials.
The US Attorney's Office - Middle District said James Holdman, 59, of Zachary, faces up to 40 years in prison and millions in fines and restitution to the victims.
US Attorney Walt Green reported Holdman made the plea in US District Judge James Brady's courtroom. He was originally scheduled to go on trial next week.
According to Green, Holdman operated a hedge fund throughout 2008 that suffered substantial losses, but concealed the failed investments with false reports that showed gains. Green added Holdman lost nearly all of the funds the victims had invested.
Many of the investors were retirees, including veterans and Hurricane Katrina survivors. Most of them were from Louisiana and Mississippi.
Green said the false representations Holdman tricked the investors into keeping their money into the hedge fund and, in some cases, investing even more money, which allowed Holdman to continue collecting fees for his own personal benefit.
However, Green added to conceal the fraud, Holdman continued to make risky investments in an attempt to recoup the losses.
Officials said Holman then sent out a letter in October 2008 to investors claiming a sharp downturn in the stock market related to the economy had caused nearly a 100 percent loss in their investment in a month, forcing the fund to be closed.