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January 31, 2013

Texas man who bilked local investors sentenced

MILLEDGEVILLE — A Tyler, Texas man who defrauded several Milledgeville investors out nearly half a million dollars has been sentenced to federal prison.

According to a press release from the United States Attorney's Office for the Eastern District of Texas, on Jan. 9, James Henry Hardee was sentenced to 30 months in federal prison for wire fraud. 

According to the U.S. Attorney's Office in Beaumont, Texas, Hardee pleaded guilty in October 2012 and was sentenced earlier this month. 

Hardee, who was serving as the managing member of an investment group based in Tyler, embezzled investor funds and used the money for personal purposes such as mortgage payments, vehicles and credit card payments. The investment group consisted of multiple investors from Georgia and was formed to open and operate multiple fast-food restaurants in Arkansas.

Nine local investors in Milledgeville were part of the group that contributed nearly $500,000 to fund restaurant group ETRG's opening of four Zaxby's restaurants in Arkansas. 

According to court documents, Hardee spent between $200,000 and $400,000 for his personal use, paying his home mortgage, vehicle expenses and credit cards. He concealed his misappropriation of funds by falsifying financial statements, including those sent to investors by electronic mail on a monthly basis. 

The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney L. Frank Coan Jr. 

U.S. Attorney spokesperson Davilyn Walston said last December when Hardee entered his plea that restitution would be part of his sentence.            

“Restitution will be ordered in connection with his sentence,” she said. “All investors should complete a victim impact statement upon receipt from our office.”

The guilty plea, Walston said, does not prevent investors from pursuing their own civil action against Hardee.

“Investors are not precluded from pursuing a civil fraud action,” she said.

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