A 46-year-old financial services representative pleaded guilty today in federal court in Minneapolis to defrauding an elderly and vulnerable couple in southeastern Minnesota of more than $400,000 and using the money for numerous luxuries.
Joseph W. Hughes, 46, of Stewartville, Minn., admitted to mail and tax evasion in connection with the scheme to defraud the couple from Elkton.
Hughes used the couple's money to buy and refurbish cars, pay tuition, make mortgage payments, pay off "substantial personal debt," buy jewelry and pay country club membership fees, according to a federal indictment.
According to his plea agreement:
From May 2004 through December 2006, Hughes was a registered representative of AXA Advisors LLC, which sold insurance and investment products, and retirement planning services.
The couple became clients in June 2005 after the husband suffered a stroke that significantly impaired his ability to manage the family's finances. After the stroke, the couple provided more than $400,000 to Hughes for investment in AXA accounts.
In June 2005, Hughes initiated a scheme to embezzle the $400,000, and he diverted the money from the couple's AXA accounts for his own use.
The money that Hughes embezzled was income that he was required to report on his tax returns, and in March 2006 Hughes prepared false and fraudulent returns.
