A former employee accused of defrauding Indiana-based Cummins Inc. and other companies out of more than $4.5 million has pleaded guilty to one count of wire fraud.
David Hudson, 54, of Columbus, Ohio, who formerly worked for Cummins in New Hudson, Michigan, pleaded guilty Tuesday in U.S. District Court in the Eastern District of Michigan.
According to the plea agreement, the fraud took place between 2008 and 2017.
In 2003, the plea agreement says, Hudson began working for a company then known as Cummins Bridgeway LLC. Cummins owned a 46 percent share of that company, whose other owners included K&S Holding, Equibridge LLC and Bridgeway Associates LLC. Cummins became sole owner of the company in 2014.
As part of his job, the plea agreement says, Hudson had the authority to transfer money to profit-sharing partners Cummins, K&S, Equibridge and Bridgeway. He also had the ability to write checks from these entities.
Prosecutors say Hudson used false pretenses to direct a subordinate to transfer company funds into one of these accounts.
“Hudson would then, without authorization, write checks from the profit-sharing entities to himself,” the plea agreement says.
As part of the plea agreement, Hudson was ordered to pay a total of $5.33 million in restitution to the four companies, including $3.46 million to Cummins.
“Mr. Hudson regrets his actions and is committed to rehabilitating himself in addition to making restitution in an effort to compensate the victims of this crime,” said Hudson’s attorney, Samuel Shamansky of Columbus, Ohio.
Shamansky said his client has already surrendered some property, the proceeds from which will go toward restitution.
Under the terms of the plea agreement, Hudson faces 51 to 63 months of imprisonment. He is free on bond until his sentencing, which is scheduled for April 15.
“This was an unfortunate incident for Cummins, but we are very pleased with the ruling,” the company said in a written statement. “Integrity is a core value of our company and we are committed to upholding it.”