Abstract: Howard Hopson's Billion-Dollar Fraud: The Rise and Fall of Associated Gas and Electric, 1921-1940

William J. Hausman


In the summer of 1940 Howard Colwell Hopson, already in a feeble state of mind, was indicted on federal mail fraud and conspiracy charges. He was accused of defrauding investors in the (by then bankrupt) utility holding company he had engineered to prominence in the late 1920s, the Associated Gas & Electric Company (AG&E). Specifically, he was accused of receiving $20 million in unlawful profits (roughly $1.3 billion in 2012 dollars, hence the title of the paper). He was convicted on December 31, 1940, and sentenced to five years in prison. He gradually went completely mad and died in a sanitarium in 1949. Examining how Hopson got into this predicament, and exploring the implications (particularly regarding holding company legislation passed in the 1930s), is the purpose of this paper.