Feds bust 'pretty inept' $45M Ponzi scheme

A New Jersey woman was charged with directing a $45 million real estate Ponzi scheme that allegedly defrauded more than 20 investors in New York and New Jersey. Antoinette Hodgson, 58, of Montclair, New Jersey, was released today on $6 million bond after appearing before U.S. Magistrate Judge Frank Maas in Manhattan. Hodgson paid off early investors in her business with funds from later participants and spent some of their money on herself, said prosecutors in the office of Manhattan U.S. Attorney Preet Bharara. Hodgson, in a scheme from 2006 to December 2009, promised high rates of return on funds to buy and renovate residential properties that would be re-sold or rented, prosecutors said. She spent hundreds of thousands of dollars at Atlantic City and Las Vegas casinos, used $70,000 to buy a Dunkin' Donuts franchise in Arizona, and gave herself, friends and family members tens of thousands more, prosecutors said. “What Antoinette Hodgson allegedly promised to investors seemed too good to be true and that's because it was,” Bharara said in a statement. “This case is a further reminder that whether the real estate market is up or down, innocent investors can be and will be targeted by unscrupulous fraudsters.” Hodgson used only $6 million of the $45 million she received to buy real estate, prosecutors said. Most of her investors' money was used to repay other people brought into the scheme, the U.S. said. She is charged with conspiracy and wire fraud. Jack Arseneault, Hodgson's lawyer, said after court that his client didn't misappropriate investors' money and will fight the charges. “If this is a Ponzi scheme, it's a pretty inept Ponzi scheme,” Arseneault said. “It was never her intent to defraud anyone.” If convicted, Hodgson faces as long as 20 years in prison, prosecutors said.