Litigation Release No. 21623 / August 11, 2010

United States v. William A. Huber, Case No. 10-cr-10088 (C.D. Ill.).

SEC v. William A. Huber and Hubadex, Inc., 09-cv-6068 (N.D. Ill.).


The Securities and Exchange Commission announced today that on August 10, former Forsyth, Illinois money manager, William A. Huber, pled guilty to one count of mail fraud, one count of money laundering and one count of engaging in prohibited monetary transactions in a case being prosecuted by the U.S. Attorney for the Central District of Illinois. Also on August 10, 2010, the U.S Attorney's Office filed a criminal Information against Huber charging that he defrauded investors by operating a Ponzi-type scheme in which he used money invested by clients to make payment to other investors. The Information also charges Huber with defrauding investors by grossly inflating the amount of money he managed and the amounts of investors' returns. The Information further charges that Huber used investor funds to support his lavish lifestyle, including paying mortgage payments and remodeling expenses for residences in California and Florida and his personal life insurance premiums. Huber is scheduled for sentencing in front of U.S. District Court Judge Joe Billy McDade on December 10, 2010.

The Commission previously filed a civil injunctive action against Huber in the Northern District of Illinois based on similar conduct on September 29, 2009. The Commission's complaint alleged that Huber, operating through his investment firm Hubadex, Inc., made Ponzi-like payments to investors by using newer investor funds to make redemption payments at inflated amounts. The complaint also alleged that Huber significantly inflated the fees that he was entitled to receive based on the outsized investment returns that he reported to investors. According to the SEC's complaint, Huber diverted over $1.9 million in investor funds into his and his wife's bank accounts and used investor funds to pay other lavish personal expenses. The SEC further alleged that on December 17, 2008, one week after Bernard Madoff was arrested for perpetrating a massive Ponzi scheme, Huber sent an e-mail message to investors reassuring them that he managed his funds honestly and that his funds bore no resemblance to Madoff's scheme. According to the complaint, Huber made a series of additional misrepresentations to investors, including, overstating the amount of assets under management and inflating investor returns. Huber also lied to SEC staff members during their investigation of his activities, reporting false account balances and claiming he had made hedge fund investments that did not exist.

On September 29, 2009, the Commission obtained an order pursuant to Huber's consent, permanently enjoining him from further violations of the antifraud provisions of the federal securities laws and freezing his assets. On October 13, 2009, U.S. District Court Judge Ruben Castillo appointed Kevin B. Duff of Rachlis, Durham, Duff & Adler, LLC as the receiver over Huber and his company, Hubadex, Inc. On October 20, 2009, the Commission instituted settled administrative proceedings against Huber in which he was permanently barred from associating with any investment adviser.

See Also: SEC Complaint


Last modified: 8/11/2010