Udy pleaded guilty to making false statements to the Division of Securities in connection with a 2002 investigation it was conducting and he pleaded guilty to securities fraud, for failing to tell later investors about his disciplinary history.
In the December of 2002. Udy was a licensed securities agent. He consented to the entry of a disciplinary order by the Division of Securities relating to promissory notes that he had sold to investors.
As part of that order, Udy claimed that he had disclosed all notes that he had issued. However, it transpired that this was far from the truth. In fact, a subsequent investigation by the Division proved that Udy had issued at least five promissory notes totalling $1314,500 which had been kept hidden from the Division.
In October of 2003, the Division took the decision to revoke Udy's license as a broker-dealer agent and barred him from the securities industry.
However, it transpired that Udy sold at least two additional promissory notes after his license had been revoked. On December 21 2005, the Utah Attorney General filed four felony counts against Udy for providing false information to the Division. This was for failing to disclose important information to investors, and for selling securities without having the necessary license.
A spokesman said: “The guilty pleas entered by Udy will be held in abeyance for 36 months. During that time, Udy is required to pay full restitution to those who gave him money to invest and provide accurate information to the State about those investors.
“If he makes full restitution and complies with the other terms of the plea agreement, the two felony counts will be reduced to Class A misdemeanours and the convictions will be entered on his record.”
Brother Udy was a prominent Mormon, having served on a Stake Presidency (similar to the Diocese in the Episcopalian or Church of England) and as Regional Representative (Ogden Utah, Riverdale Utah, Syracuse Utah, and Clearfield Utah regions) of the Presidency of the LDS/Mormon church, the largest of several sects of the original polygamous cult founded by Joseph Smith.
It has been claimed that Udy cheated investors, many of whom were friends and fellow Mormons.