Update: Former city CFO charged with wire fraud in unsealed federal indictment
By JIM BROOKS
Nelson County Gazette / WBRT Radio
Tuesday, Jan. 25, 2022 — In a 4 p.m. press conference, Bardstown Mayor Dick Heaton confirmed that the Tracy Hudson, the city’s former chief financial officer, was arrested by federal agents earlier Tuesday and was facing charges related to her alleged embezzelment of $764,000 in city funds between April 2013 and September 2019.
Hudson, 41, of Bloomfield, was arrested at 10:13 a.m. Tuesday morning and lodged in the Oldham County Detention Center following her indictment last week by a federal grand jury.
In the indictment, Hudson is charged with one count of wire fraud in violation of Title 18, United States Code, Section 1343. Hudson made her initial court appearance Tuesday before U.S. Magistrate Judge Colin H. Lindsay of the U.S. District Court for the Western District of Kentucky.
If convicted, she faces a maximum penalty of 20 years in prison.
During the Mayor’s press conference, he said the fact that she is being charged in federal court will be an advantage for the city as it continues to seek full restitution for the embezzled funds.
Heaton said the theft wasn’t just from the City of Bardstown, but from the city taxpayers and utility customers who live in the city and county.
Hudson was first employed as the city’s Occupational Tax administrator before becoming chief financial officer.
According to court documents, Hudson stole funds from the city by various means, including by taking cash from the City of Bardstown funds for her own personal use, paying herself for false expense reimbursements, diverting additional payments into her 401k pension plan in excess of the amount withheld from her wages, purchasing personal items on a City of Bardstown credit card without authorization, and crediting payments to her personal accounts with the City of Bardstown despite no actual payment having been made.
To date, the city has recovered some of the money — a total of $484,000. Of that amount, $134,000, was money Hudson returned to the city through her attorney not long after she was suspended from her job. The city received an additional $350,000 in reimbursement from the company that provided Hudson’s performance bond.
According to the indictment, Hudson is charged with one count of wire fraud in violation of Title 18, United States Code, Section 1343.
Hudson made her initial court appearance today before U.S. Magistrate Judge Colin H. Lindsay of the U.S. District Court for the Western District of Kentucky. If convicted, she faces a maximum penalty of 20 years in prison.
The FBI and the Kentucky State Police are investigating the case. Assistant U.S. Attorney Stephanie M. Zimdahl is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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