A federal grand jury has indicted a Santa Rosa man on charges he stole $2 million in an investment scheme targeting the founder of a Virginia nonprofit that provides online classes to students around the globe.
Douglas Dean Hollingsworth, 62, is accused of taking loans under false pretenses from Appu Kuttan, chairman of the National Education Foundation, and using the money for his own financial gain.
“To me, it's stealing from kids,” said Kuttan, a businessman and philanthropist who founded the Alexandria, Va., charity in 1989. “It's horrible.”
Hollingsworth was indicted on nine counts of wire fraud. If convicted, he faces a maximum 20-year federal prison sentence for each count.
He was arrested Sept. 1 and pleaded not guilty at his arraignment in U.S. District Court in San Francisco. He surrendered his passport and posted an appearance bond of $100,000. His next hearing is Sept. 28.
Hollingsworth would not answer questions about the indictment, but issued a statement through his attorney representing him in a separate civil case.
“It would be inappropriate for me or any of my advisors to comment indepth on a pending criminal case. We have not had a chance to review fully the indictment. However, we feel this is more in the nature of a civil dispute and we will address it at the appropriate time,” Hollingsworth said in the statement, read by attorney Bob Anderson of Lanahan Steever & Anderson LLP.
Hollingsworth is represented by Chris Andrian in the criminal case. He could not be reached for comment.
The 11-page indictment accuses Hollingsworth of fraud occurring between June 2008 and May 2009 when he was doing business as Baytree Investors. The alleged victim — identified only as A.K. in court papers — is described as someone introduced to him by a mutual acquaintance.
Hollingsworth claimed to have created a profitable trading method that would bring significant returns in the form of high monthly interest rates, according to the indictment.