A Central Kentucky businessman who once owned breeding rights to 1998 Kentucky Derby winner Real Quiet has pleaded guilty to money laundering and the theft of $600,000 from two employee pension plans.
George S. Hofmeister, 65, could face up to 15 years in prison after entering a plea agreement last week in U.S. District Court in Lexington.
He pleaded guilty to two counts of a six-count 2016 indictment; the government will seek dismissal of the remaining four counts at sentencing.
The plea was made before a federal jury trial was to begin next week.
Hofmeister’s Highland Farms in Bourbon County had bought the breeding rights to Real Quiet five weeks before the horse won the 1998 Kentucky Derby. Real Quiet also won the 1998 Preakness Stakes. The horse died in 2010.
In 2009, Hofmeister became the trustee of two pension plans called the Hillsdale Salaried Plan and the Hillsdale Hourly Plan. The plans were established to benefit the employees of Metavation, an auto parts manufacturer controlled by Hofmeister family trusts.
The indictment alleged that in 2010, Hofmeister had used pension plan assets to buy a 65 percent ownership interest in SIF Technology, a Florida company that produced digital images on leather products.
Another investor in SIF Technology was Jeffrey Owen. Revstone, an auto parts conglomerate then controlled by Hofmeister family trusts, owed money to Owen from a previous business venture, the plea agreement says.
In 2011, Hofmeister authorized the wire transfer of $600,000 from the pension plans ($414,000 from the hourly plan and $186,000 from the salaried plan) to SIF Technology, the plea agreement says. Then, at Hofmeister’s direction, Owen wired $200,000 to AMI Morton Fabrications, another company controlled by the Hofmeister family trusts.
The $200,000 was ultimately used for Hofmeister’s personal benefit, the plea agreement says.
In addition, Hofmeister directed that $75,000 was to be paid to Owen “as payment on the debt owed by Revstone.”
Financial troubles have kept Hofmeister tied up in various courts for years.
On a personal front, Hofmeister’s Highland Farms estate in Bourbon County, including a three-story mansion with 12 bedrooms and 13 full bathrooms, sold at auction in July for $3.1 million to Sword Farm Real Estate of Richmond, according to a deed and court records.
The sale was court-ordered because Hofmeister and his wife were in default on a 2000 mortgage, according to Bourbon Circuit Court records.
Of the $3.1 million in proceeds, $609,155.12 went to Central Bank and $186,000 in commission went to the auction company, Halfhill Auction Group. There are about $70,000 in unpaid property taxes. More than $2 million has yet to be distributed from the sale, according to a master commissioner’s report filed in the court record.
Hofmeister is scheduled to be sentenced Feb. 7 in Lexington.