Defendants Sentenced for Running Separate Ponzi Schemes
CHARLOTTE, N.C. — Two Charlotte men were sentenced late Thursday, January 17, 2013, for carrying out two separate Ponzi schemes involving trading in the commodities futures market, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Mitchell Brian Huffman, 52, of Charlotte, was sentenced by Chief U.S. District Court Judge Robert J. Conrad, Jr. to serve 60 months in prison, followed by three years of supervised release. Huffman was also ordered to pay restitution to his victims, the final amount of which will be determined by the Court within 60 days. During the sentencing hearing, Judge Conrad also ordered the defendant to forfeit approximately $2.5 million the Court deemed as proceeds of Huffman’s criminal conduct.
In September 2011, Huffman pleaded guilty to engaging in a $2.5 million Ponzi scheme. According to filed court documents and court proceedings, from 2006 through in or about March 2011, Huffman raised approximately $3.2 million dollars from his victims by falsely claiming that he was generating annual rates of return between 100% to 150% using his proprietary trading program to trade in the commodities futures market.
Huffman directed his victims to transfer their funds to his personal bank account. Court records show that of the $3.2 million Huffman fraudulently obtained from his victims, he only utilized a little over 50% of the funds (approximately $1.7 million) to engage in trading activities. To conceal the fraudulent scheme, Huffman generated bogus monthly statements to his victims which falsely reflected fictitious profits from trading activities, when in fact Huffman sustained massive losses. During this time, Huffman made also Ponzi payments of approximately $834,160 to victim investors, falsely representing that these payments were profits from trading activity.
According to filed documents and statements made during court proceedings, Huffman used the victims’ funds, without their knowledge or consent, for personal expenses, including to purchase multiple vehicles, take luxurious vacations, and to make charitable contributions. At the sentencing hearing, Judge Conrad said that Huffman took away “retirements, college educations funds and houses” from his victims and caused them to go through “financial hardships and depression.”
Robert S. Moss, 49, also of Charlotte, was sentenced to 57 months in prison followed by three years of supervised release, and was ordered to pay $1,460,121 as restitution. Moss pleaded guilty in September 2011 to one count of commodities fraud, for engaging in a $1.5 million Ponzi scheme. From at least in or about 2001 through in or about February 2009, Moss solicited investments totaling approximately $3.1 million from victims nationwide.
In a similar modus operandi, Moss lured his victims by falsely claiming that he was generating substantial profits through options trading in the commodities futures market. Filed documents indicate that Moss told his victims that he had not had a losing year trading since 1993, that he generated annual returns of between 22% and 41% annually, and that none of his investors had ever lost any capital. In fact, between 2003 and 2009, Moss suffered losses of $342,264 in the commodities futures market. Moss also advised the victims that his liquid assets were more than three times the size of his trading account when in fact they were not.
Both Huffman and Moss were ordered to pay restitution to their victims. Huffman was ordered to forfeit approximately $2.5 million in proceeds of his criminal conduct, while Moss was ordered to pay $1,460,121 as restitution. The two men were sentenced for their respective roles in defrauding victims out of millions of dollars through their separate Ponzi schemes.
U.S. Attorney Anne M. Tompkins praised the work of the FBI and the North Carolina Secretary of State in bringing the cases to justice. “These two defendants preyed on unsuspecting victims, lying to them about their investment returns and using their money for personal gain,” Tompkins said. “We are committed to holding accountable those who engage in these egregious crimes and to providing justice for the victims who have been harmed.”
Key Facts
- State: North Carolina
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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