Hughes was recommended to Levein as a possible signing, but the Tannadice chief has shelved his interest in the former West Brom star.
The 32-year-old had a spell in jail after a highly-publicised fatal car crash in 2004 before joining Oldham last August.
Levein insists the decision to drop his interest in Hughes was because of finances and nothing else.
"I got a call from an agent regarding Hughes and was told he was out of contract when in fact he still had a year to run, so that was that," said Levein.
"It was an unfortunate incident that occurred but that did not come into my thinking.
"It was down to footballing reasons and we're still carrying on our search for two strikers."