KANSAS CITY, Mo. — A 51-year-old Lenexa man was sentenced to 114 months in federal prison without parole for a multi-million dollar investment fraud scheme and owes over $5 million in restitution to the victims.
The court ordered Phillip Hudnall’s sentence to be served consecutive to a 9-year sentence currently being served in Colorado for a separate securities fraud scheme conviction.
Hudnall was an owner of BirdDog Business Group, LLC where he offered investments opportunities to buy, refurbish and sell used oil equipment to high net work victims.
He told investors that their principal, plus 20% to 30% interest would be returned within 9 months.
With the help of his brother, Brian, he convinced investors that the company already completed successful transactions from two loans of $244,000 and $490,000. Brian helped Phillip created fraudulent memorandums and checks to support the falsified transactions.
Between February and June 2019, Phillip transferred approximately $4.1 million from his company’s oil equipment account to the DonDon bank account that Brian owned.
Brian then transferred the money from the DonDon account to the Kansas Oil Reserve 2 account, another company owned by his brother Phillip.
Court records state, Phillip used less than $1 million on oil equipment and used the rest to purchase mineral rights in Weld County, Colorado, a BMW X7, and the rest spread out amongst his other businesses personal accounts.
The court said Phillip continued to participate in fraud schemes after pleading guilty in this case and continued to promise investors their returns.
Four days after pleading guilty, Phillip applied for a Paycheck Protection Program (PPP) loan. He listed two employees on the application and that he had not been convicted of a felony.
The loan for $34,100 was denied, but he applied again a week later for $29,520 under the same circumstances and was approved.
Phillip is ordered to pay $5,272,689.84 back to his victims and must forfeit his BMW and mineral rights.