A New Jersey woman has pleaded guilty to conspiracy to commit wire fraud in connection with her operation of a $45 million Ponzi scheme that fraudulently solicited investments in real estate from more than 20 New York and New Jersey investors, according to Preet Bharara, U.S. attorney for the Southern District of New York.
Antoinette Hodgson pleaded guilty to a two-count information before U.S. Magistrate Judge Ronald L. Ellis in Manhattan Federal Court.
According to the information and statements made in court, as well as the complaint previously filed in the case, Hodgson solicited tens of millions of dollars from investors in New York and New Jersey on the false pretense that she would use the investors’ money to purchase and/or renovate residential real estate properties and then resell the properties to third-party buyers, or rent them for a period of time before reselling them.
Prosecutors said the New Jersey woman promised investors high rates of return on their investments, which she represented as being based on the profits generated by her successful real estate business.
Hodgson is alleged to have misappropriated tens of millions of dollars of investors’ funds and used those funds to either repay other investors or for her own purposes. Between 2006 and 2009, officials say she Hodgson solicited approximately $45 million from investors who understood—based on Hodgson’s representations—that they were investing in her real estate business.
During the same period, prosecutors allege Hodgson “only spent approximately $6 million on residential real estate.” Most of the $45 million she received was immediately used to repay other investors in the pattern of a classic Ponzi scheme.
Some of the investor money was used to enrich Hodgson and her family members. Hodgson spent hundreds of thousands of dollars at casinos in Atlantic City and Las Vegas, invested over $700,000 in a Dunkin’ Donuts franchise in Arizona, and gave tens of thousands of dollars to friends and family members.
As a result of her guilty plea, Hodgson, 58, of Montclair, N.J., faces a maximum penalty of 40 years in prison and a maximum fine of $500,000, or twice the gross gain or loss derived from the offense.
In addition, Hodgson has agreed to forfeit her interest in 24 properties that she purchased as part of the scheme and all her rights, title and interest in the Arizona Dunkin’ Donuts franchise. She also agreed to forfeit $5 million as the proceeds of her offenses.
