James R. Holdman of Zachary, Louisiana pleaded guilty to two counts of mail fraud this week. According to U.S. Attorney Walt Green and former U.S. Attorney Donald J. Cazayoux Jr., Holdman defrauded retirees, military veterans, and survivors of Hurricane Katrina in Louisiana, Mississippi, Texas, and Florida out of $13 million. Holdman used his Baton Rouge, Louisiana office, called Greenwing Capital Management LLC, to promote his Greenwing, Bluewing, and Silverwing funds.
From February to October 2008, Holdman admittedly gave his investors fake statements on a regular basis that showed profits. The investments, however, were not profitable. Either the investments failed or Holdman used the investors' money for his personal affairs. According to his confession, Holdman was able to continue to operate the fund by concealing its actual performance, and over the course of a whole year he continued to lose almost all of the investors' money.
In October 2008, Holdman mailed a letter to each of his investors, telling them that 98.67% of their investments had been lost in the past month and that he had to close his investment funds. In actuality, most of the losses had happened previously while he was still acquiring money from his customers.
Holdman pleaded guilty on two counts of mail fraud involving a total loss of at least $400,000. In exchange for these guilty pleas, prosecutors agreed to dismiss sixteen more counts of mail fraud against Holdman. He is facing a potential 20-year prison term and fine of $250,000 for each mail fraud charge he was convicted on.