Tippecanoe County man arrested for mortgage fraud

March 26, 2010

James Hudson charged with falsifying $35,000 in proceeds from a refinanced mortgage

INDIANAPOLIS – Indiana Secretary of State Todd Rokita’s Prosecution Assistance Unit is partnering with the Clinton County Prosecutor on a mortgage fraud investigation that has led to the arrest of James R. Hudson, Jr. of Lafayette for a felony violation of the Indiana Loan Broker Act.  The charges filed concern allegations Hudson misappropriated money from the proceeds of a client’s refinanced mortgage. If convicted, Hudson could receive up to three years in prison for the Class D felony count.

“For most Hoosiers, a home is one of the largest investments they will ever make,” said Secretary Rokita. “Hoosiers purchasing homes or refinancing mortgages need to be vigilant through each step of the mortgage process and alert my office or local authorities if something doesn’t seem right.”

According to the probable cause affidavit filed by Clinton County Prosecutor Anthony Sommer on January 25 in the Clinton County Circuit Court, Hudson was the owner and operator of Indiana Mortgage, LLC, a licensed loan broker based in Clinton County. Hudson allegedly brokered a refinanced mortgage for a Tippecanoe County man. According to the affidavit, the HUD 1 Settlement Statement indicated that the victim’s net proceeds would be $46,603. However, Hudson allegedly gave his victim a cashier’s check for only $10,983 and persuaded him to believe this was the net proceed amount.

Hudson allegedly told his victim that the reason the net proceeds were lower than what was indicated on the statement was that there were tax liens from the victim’s previous business that had to be satisfied. According to the probable cause affidavit, Hudson allegedly wrote checks for the remaining $35,619 for his own personal use, including a $308.20 check made to Best Buy and a $1,250 check he made out to himself.

The counts described are allegations. Hudson is presumed innocent until proven guilty.

For more information on how to avoid becoming a victim of investment fraud, visit www.IndianaInvestmentWatch.com.

About the Prosecution Assistance Unit   

In 2004, Indiana Secretary of State Todd Rokita created the Prosecution Assistance Unit within the Securities Division of the Secretary of State’s Office. Its sole purpose is to assist police and prosecutors in investigating and prosecuting criminal violations of the Indiana Securities Act and the Indiana Loan Brokers Act. The investigators and attorneys in the unit collectively have over 72 years of experience in investigating and prosecuting criminals. Since its inception, the Unit has helped to convict 48 criminals in state and federal courts across Indiana in cases that have resulted in over 300 years of time sentenced. In addition, courts have ordered defendants to pay over $29.9 million in restitution to crime victims.

Media Contact: Jim Gavin, 317.233.8655, jgavin@sos.in.gov