The CEO of Grapevine-based United Development Funding along with three other company executives are expected to spend years behind bars after a sentencing hearing this morning in federal court in Fort Worth.
A federal jury on Jan. 21 found Hollis Greenlaw and three other officers of UDF guilty on all 10 counts each faced. The convictions included securities fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud affecting a financial institution, among others.
Greenlaw, who served as chairman of UDF’s board of trustees in addition to CEO, was sentenced to seven years in federal prison by U.S. District Judge Reed O’Connor in the hearing Friday in federal court in Fort Worth.
Cara Delin Obert, UDF chief financial officer; Jeffrey Brandon Jester, UDF director of asset management; and Benjamin Lee Wissink, UDF partnership president and committee member, were sentenced in the same session.
Obert and Wissink were sentenced to five years, while Jester was sentenced to three.
None of the executives were ordered to pay restitution despite a calculation by the government that put the amount of losses at well over $100 million.
Coming into the hearing, the four faced sentences of up to 27 years in federal prison, according to prosecutors.
Assistant U.S. Attorney Tiffany Eggers asked O’Connor to sentence Greenlaw to 20 years.
“For five years, this man led a Ponzi scheme,” Eggers said. “Anybody off the street knows it’s a Ponzi scheme. And he has a law degree.”
Eggers said Greenlaw still hasn’t admitted that what he did was wrong. “He to this day hasn’t recognized that he was committing a Ponzi scheme,” she said. Eggers said Greenlaw was motivated by greed, pure and simple. “This man saw dollar signs.”
Paul Pelletier, who represented Greenlaw and UDF, requested that the CEO not be incarcerated at all. “There was no evidence that Hollis ever directed or asked anyone to do anything wrong,” Pelletier said. Greenlaw has always been the opposite of greedy, said Pelletier, who called him “generous to a fault.”
Pelletier argued that no investors lost money in the UDF case.
Federal prosecutors, by contrast, claim that roughly 30,000 investors nationwide lost money or were misled by UDF’s executives.
Greenlaw called it “one of the most difficult days of my life.”
“I have always strived to be good, kind and merciful, and our family has given back greatly to the community,” he said.
The number of years each defendant received depended on how much the financial losses were calculated to total and on each defendant’s role and level of participation in the crimes, among other factors, according to federal sentencing guidelines.
For more on the UDF trial, please visit the Dallas Business Journal.