Former Attorney Receives Thirty-Three Months for Embezzling Money from his Client

United States Attorney Richard W. Moore of the Southern District of Alabama announces today that Chief United States District Judge Kristi K. DuBose sentenced David Hudgens, 66, a resident of Daphne, Alabama, to imprisonment for thirty three months for committing wire fraud. As part of the sentence, the judge ordered that Hudgens undergo three years of supervised release after finishing his term of imprisonment, pay a $100 mandatory special assessment, undergo credit restrictions, receive a mental health evaluation, and pay restitution totaling $624,686.70 to the victim in the case.

According to documents filed with the court as part of his guilty plea and testimony from Friday’s sentencing hearing, Hudgens was a lawyer in Baldwin County, Alabama who previously represented an individual identified in court documents as B.W. From around 2012 to around November 2016, Hudgens willfully and knowingly executed a scheme to defraud B.W. and achieve personal financial gain by means of materially false and fraudulent pretenses, representations, and promises, knowing at the time that the pretenses, representations, and promises were false.

In 2012, B.W. retained Hudgens to represent her in legal matters and act as a custodian of B.W.’s business funds. Hudgens maintained these funds in two Interest on Lawyer Trust Accounts (IOLTA) on B.W.’s behalf. IOLTA accounts are bank accounts managed by lawyers who hold money received from a client to help fund the legal representation. As part of his scheme to defraud, Hudgens misappropriated B.W.’s funds held in the IOLTA accounts for his own personal use. He did so without B.W.’s permission and made material misrepresentations to B.W. and others in the process. At various times during his scheme, Hudgens made unauthorized wire transfers of funds belonging to B.W. and transmitted wire communications in interstate commerce.

On April 13, 2018, Hudgens was charged with one count of wire fraud in violation of 18 U.S.C. § 1343. On April 25, 2018, Hudgens pleaded guilty before Chief Judge DuBose to the charge. As a result of his criminal conduct, Hudgens has been disbarred from the practice of law in Florida, Alabama, and Mississippi. State jurisdictions commonly have strict rules in place that govern the management of IOLTA accounts. 
  
The Federal Bureau of Investigation investigated the case. Assistant United States Attorney Sinan Kalayoglu prosecuted the case.