The U.S. District Court for the Northern District of Texas has issued an order granting the Securities and Exchange Commission’s request for an asset freeze against Excel Lease Fund, Inc. and its owner, Benny L. Judah. Both are accused of being involved in a $40 million Texas securities fraud scheme that affected hundreds of investors.
In the consent order, the defendants did not admit to or deny the SEC’s allegations. Judah, a Texas business person, also agreed to an injunction barring him and any of his entities from issuing securities. He has control over 78 Texas businesses and plays a leadership role in almost 50 of them.
The SEC says that beginning January 2006, the defendants made a high-yield debenture offering to investors, while telling them that their money would go toward a number of “legitimate business” uses, including helping to retire a series of earlier debentures. The agency contends that Judah actually used the funds for non-Excel business purposes, as well as for his personal use. Investigators say at least $5 million of the funds may have been lost through day trading.
In addition, the SEC is accusing the defendants of overstating by at least 30% the value of assets behind the debentures, neglecting to disclose about $20 million in related-party loans to other Judah-owned companies, and overstating Excel’s assets through the use of some $15 million in bogus lease contracts. The SEC wants to obtain permanent injunctions, fines, and disgorgement against the defendants.
Over the years, our Texas securities fraud lawyers have helped many investment fraud victims recoup their losses.
Related Web Resources:
Benny L. Judah and Excel Lease Fund, Inc., SEC.gov, April 21, 2009
Feds freeze assets of Lubbock businessman Benny Judah, NewsChannel11, April 22, 2009
Read the SEC Complaint (PDF)
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