Collin County Man Admits Embezzling Approximately $1 Million from Employer, Hudson Advisors LLC, in Wire Fraud Scheme
|U.S. Attorney’s Office July 30, 2013|
DALLAS—Steven Chen Yu, 39, of Allen, Texas, appeared before U.S. Magistrate Judge Paul D. Stickney this morning and pleaded guilty to an information charging wire fraud in connection with his attempt to embezzle approximately $1 million from his employer, Hudson Advisors LLC, and its global subsidiaries (Hudson). Yu, who remains on bond, faces a statutory maximum penalty of 20 years in federal prison, a $250,000 fine, or twice any pecuniary gain to Yu or loss to the victim(s) and restitution. A sentencing date was not set. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Hudson was a globally integrated asset management company that performed due diligence and analysis, asset management, and other support services for Lone Star Funds, a leading private equity firm that invested globally in distressed assets. Hudson employed approximately 800 professionals in the U.S. and had affiliate offices in Europe, Canada, and Japan. Hudson’s main offices were in Dallas.
Hudson maintained a private client department that employed several private client managers. It was responsible for providing accounting and bill payment services for Hudson owner J.G. As part of his duties, Yu was authorized by Hudson to access all J.G.’s personal financial information.
From September 2009 through March 2012, according to documents filed in the case, Yu engaged in several fraudulent acts which enabled him to embezzle substantial funds belonging to J.G. For example, in September ti October 2009, Yu fraudulently re-submitted duplicate invoices for legitimate repair work that had been done on J.G.’s boat, knowing that the invoices had already been paid. Yu substituted his own personal bank account information, and in this manner, was able to fraudulently divert and embezzle $150,572 from J.G.’s accounts.
In another scheme, and in a similar manner, on December 1, 2009, Yu defrauded J.G. by also using duplicate invoices for landscaping work that had previously been done on J.G.’s personal residence in Massachusetts. Yu was able to fraudulently divert and embezzle more than $69,000 in funds from one of J.G.’s trust accounts for duplicate payment on the landscaping work. However, later in December 2009, Yu fraudulently caused the more than $69,000 to be deposited back into the account from which they had been diverted prior to Hudson becoming aware of any of Yu’s unlawful activities in connection with the fraudulent diversion or embezzlement of funds.
As part of a larger scheme, beginning in 2009 and continuing through March 2012, Yu fraudulently used and diverted J.G.’s funds, which Yu used to make advance “estimated tax payments” for Yu’s benefit in connection with his own future state income taxes due in Massachusetts. When Yu filed his personal income tax returns with Massachusetts, he claimed that he owed no taxes and requested Massachusetts pay him a complete refund of all the estimated tax payments he had made to the state with funds he had stolen from J.G.
During the period from about 2009 through March 2012, as part of his scheme to defraud, Yu attempted to steal and embezzle a total of approximately $1,292,000 from Hudson owner J.G.
The investigation was conducted by the FBI. Assistant U.S. Attorney David L. Jarvis is in charge of the prosecution.