A Monterey lawyer who used his position as building trustee that operated the historic Elite Cafe in San Francisco to embezzle nearly $ 700,000 in fraudulent loans will spend two years in federal prison.
The exterior of the Elite Cafe in San Francisco, California can be seen on February 23, 2016. The historic restaurant closed after 38 years in 2019 due to financial problems.
John Arthur Hudson, 71, was also ordered to pay $ 828,521.52 in restitution, Acting U.S. Attorney Stephanie Hinds said Thursday.
According to court documents, Hudson was appointed administrator in 2011 for the Fillmore Street property that owned the famous cafe, known for its New Orleans-style cuisine. Over the next seven years, he used that position to get $ 693,000 in loans against the property he hid from the trust beneficiaries, Hudson admitted in a plea deal.
Hudson pleaded guilty last year to using the money to pay off his mortgage and personal expenses. He also falsified the trust fund balance.
Hudson was ordered to begin serving his sentence on September 13.
The Elite Cafe operated for 38 years in a 2,000 square foot venue on Fillmore Street in California Street. She was known for her okra, jambalaya and other essentials of Creole cuisine.
The cafe closed in 2019 due to economic hardship, owner Andrew Chun told The Chronicle at the time. It was not immediately clear whether Hudson’s actions affected that decision.
But according to the North District Office of the US Attorney, Hudson admitted to using the Fillmore property as collateral to secure loans which he then withheld from the two trust beneficiaries. He also did not use the loan proceeds to improve the Fillmore property as he represented to lenders, federal prosecutors said in a statement.
In January, Hudson’s license to practice law was suspended in connection with the conviction, according to the California State Bar.