A former West Islip stockbroker already facing prison for defrauding producers out of money for a planned Broadway musical, admitted in federal court in Central Islip Tuesday that he has been bilking investors for the past 17 years.
Mark Hotton, 47, pleaded guilty to a charge of conspiracy to launder money that included allegations filed in October 2012 that he defrauded two companies out of $3.7 million between 2009 and 2010. The charges were filed in federal court in Central Islip at the same time he faced charges of bilking theater producers out of money raised to back "Rebecca, the Musical" on Broadway and defrauding a Connecticut real estate company.
Hotten pleaded guilty Monday in federal court in Manhattan to defrauding the Broadway investors and real estate company out of nearly $500,000. He could face up to 41 months in prison when he is sentenced in that case Nov. 1.
Tuesday, Hotton pleaded guilty in Central Islip to the conspiracy charge as part of the plea bargain. In admitting his guilt for the second time in two days, Hotton agreed with federal prosecutors' claims that he had engaged in violations of the mail, wire, and securities fraud statutes as well as embezzling from an employee benefit plan since 1995.
Though no monetary amount was placed on the extent of the 17-year money-laundering conspiracy, federal prosecutors in court papers have estimated the total amount of the frauds was more than $15 million.
Federal prosecutor Burton Ryan said in court that Hotton used the monies to purchase and operate a number of companies, including a contracting business in Farmingdale.
The $3.7 million fraud charges involved Hotton allegedly selling phony accounts receivable worth a total of $7.2 million to a New Orleans business for $2.6 million, and another $2.6 million in phony accounts receivable to a Michigan company for $1.1 million.
"I created false invoices to generate payments . . . that I was not entitled to," Hotten told U.S. District Judge Joanna Seybert.
Legitimate accounts receivable are usually sold at a discount by a business in need of quick cash.
Hotton faces between 96 to 121 months in federal prison when he is sentenced in Central Islipearly next year.
Seybert said she would release Hotton on $1 million bond, backed by property, as soon as the proper paperwork is completed. Other conditions of his release, Seybert said, included that Hotton be electronically monitored, and that he get a job that did not involve finance or sales.
After the sentencing, Hotton's attorney Marianne Rantala and Ryan both declined to comment.