Kansas brothers plead guilty to oil, gas fraud

KANSAS CITY, Mo. (AP) — Two Kansas City-area brothers have pleaded guilty in a scheme to defraud oil and gas investors out of millions of dollars.

Phil Hudnall, 49, of Lenexa, Kansas, pleaded guilty Friday to one count of conspiracy to commit money laundering, The Kansas City Star reports. Brian Hudnall, 43, of Kansas City, Missouri, pleaded guilty midweek to the same charge. A third man accused in the scheme, Duc Nguyen, of Houston, Texas, pleaded not guilty this month to wire fraud.

According to court documents, Phil Hudnall, a former cross country coach, solicited more than $4 million from investors in 2019 by promising rapid returns of 20 to 30 percent on their investments.

Instead, Hudnall spent most of that money on a land deal and personal expenses, including a $100,000 sport utility vehicle. Brian Hudnall helped launder the money and took a cut for himself, court records said.

Phil Hudnall transferred more than $1 million to Nguyen to buy oil and gas equipment. But Nguyen spent the money on a car and at casinos instead, according to federal prosecutors and the Securities and Exchange Commission, which has filed a civil case.

Under their plea agreements, the Hudnalls must repay their victims and forfeit $3.8 million. Sentencing dates have not been set.