Charlotte, NC – Mitchell Brian Huffman was ordered to pay $2.1 million in penalties and $3.2 million in restitution after admitting to operating a fraudulent commodity pool scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced March 24, 2014. The supplemental Consent Order, entered on March 20, 2014, by Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina, follows a prior injunction issued in May 2012.
Huffman defrauded customers of more than $3.2 million between August 2006 and March 11, 2011, through a scheme involving exchange-traded commodity futures contracts. He solicited funds from approximately 30 participants, primarily family and friends, promising annual profits of 100 to 150 percent through a “proprietary trading program.” He claimed a 20 percent share of any profits generated.
However, the CFTC’s complaint and subsequent Consent Order revealed these representations were entirely false. Huffman misappropriated participant funds for personal expenses, including luxury vehicles – two Land Rovers and a Smart Car – a classic car collection totaling $71,255, personal travel and vacations amounting to $188,583 (including Disney cruises and first-class trips to Hawaii and Las Vegas), and $51,540 in charitable donations made in his name.
Notably, Huffman used pooled funds to finance a 25th wedding anniversary trip to Hawaii, bringing along some participants under the guise of it being a personal expense. The participants were unaware their own money was funding the lavish vacation. In addition to the financial penalties and restitution, Huffman is permanently banned from trading and registering with the CFTC, and is prohibited from future violations of federal commodities laws.
The case, United States v. Mitchell Brian Huffman, case number 3:1-cr-00246 RJC, was filed in the U.S. District Court for the Western District of North Carolina.
Source: CFTC.gov
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