A Louisiana youth baseball coach was sentenced to prison for operating a Ponzi scheme that duped investors out of hundreds of thousands of dollars - including parents of players on his baseball team. Hugo Urrea, 55, pled guilty Monday to a variety of charges including securities fraud, nine counts of felony theft, and money laundering in excess of $100,000 before State Judge Allison Penzato. Judge Penzata sentenced Urrea to 20 years for the money laundering charge, with 15 of those years suspended; five years for the securities fraud charge; and 10 years for the theft charges, with five of those years suspended. Urrea will likely serve several years in prison, as the sentences were ordered to be served concurrently, rather than consecutively. Along with the sentence, Judge Penzata also ordered Urrea to pay $247,000 in restitution to his victims.
According to authorities, Urrea solicited individuals to invest with him or enlist his services for investment advice. However, investors were not told that, over the past twenty years, Urrea had been fired from six different broker-dealers, and that several complaints had been filed against him for violations including the unauthorized signature of customer names and engaging in unauthorized trades, according to records maintained by the Financial Industry Regulatory Authority ("FINRA"). According to FINRA, Mr. Urrea has not been registered with a broker-dealer since 2009 and had since been ordered to cease-and-desist from acting as an investment adviser. This information was freely available using FINRA's Broker-Check option available to the public.
In total, Urrea received approximately $419,000 from nearly two dozen individuals that included neighbors and parents of players on the baseball team coached by Urrea. However, rather than use investor funds as promised, Urrea instead used the money for a variety of personal expenses including paying his mortgage and his son's college tuition to Auburn University. When some clients began to question Urrea's services, he used funds from other investors to satisfy the redemption requests. He was arrested in September 2011.
Upon his release from prison, Urrea must also serve five years of active supervised probation.
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
For more information about LexisNexis products and solutions connect with us through our corporate site.