A week after being pegged with a $37 million civil penalty for supposedly shady investment deals, local insurance agent/businessman Julius Everett “Bud” Johnson pleaded guilty in federal court Monday to several counts, including fraud, according to an Associated Press report.
The AP reported that Johnson, 62, entered a guilty plea in U.S. District Court in Richmond on Monday in a suit that charged him with conspiracy to commit mail, wire and bank fraud, and engaging in unlawful monetary transactions.
Johnson had been under the watch of the Virginia State Corporation Commission since 2009, when it suspected him and an associate in North Carolina of running a Ponzi-like scheme related to about a dozen businesses he owned.
Johnson and his associate had allegedly been selling securities and promissory notes to investors related to entities such as a cleaning service and an awning company, many of which were located in Richmond.
In slapping Johnson and the others with the large penalty, (read more about that here) the SCC said last week that Johnson was limited in how he could defend himself against the state’s claims because of a pending federal investigation.
The details of that investigation had not been released until the federal suit was finally filed last week.
The federal suit, much like the state’s case against Johnson, claimed that Johnson and an associate sold securities to investors in companies but then used those proceeds to pay off other investors or commingled the funds into other businesses.
According to the federal case, at least two of the businesses Johnson owned existed only on paper.
Johnson, according to the AP report, is scheduled for sentencing July 19 and faces a maximum of 15 years in prison and a fine of $500,000.
In ordering the $37 million penalty against Johnson and the other defendants, the SCC stipulated that the penalty could be avoided if $11 million in restitution was paid to investors within a year.
Johnson declared bankruptcy in late 2010.
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected]