Last Friday, two Charlotte men, Mitchell Brian Huffman and Robert S. Moss,
pled guilty to commodities fraud in connection with two separate
Ponzi schemes that promised investors huge profits through trading in the commodities
future market. Both men were charged with engaging in their respective
investment schemes on Aug. 11.
According to the U.S. Attorney's office, Mitchell Brian Huffman fraudulently
raised $3.2 million from approximately 30 investors in a five-year-long
Ponzi scheme purported to use a proprietary commodities futures trading
program that would yield annual returns of 100 to 150 percent.
Court documents show that Huffman directed investors to deposit their funds
into his personal bank account. He then used $1.7 million to engage in
trading activities, which resulted in massive losses. The remainder of
the funds was used to make Ponzi payments to other investors and to pay
for Huffman's personal expenses. Like many Ponzi schemers, he used
falsified monthly statements to cover up his scheme.
Moss's scheme was longer, according to the U.S. Attorney's office,
but involved fewer victims. Approximately 22 people invested $3.1 million
with Moss from 2001 through Feb. of 2009. Moss falsely claimed that he
was generating substantial profits (from 22 to 41 percent annually) from
options trading in the commodities futures market, and that none of his
investors had ever lost any capital. In fact, Moss lost $342,264 in the
commodities futures market between 2003 and 2009, and made Ponzi-style
payments to investors to cover up his scheme. He also misappropriated
a portion of investor funds for his personal use.
Sentencing dates for the two men have not yet been set. Both men face a
potential 25 years in prison and/or a $250,000 fine. Moss has already
agreed to pay $2 million in restitution to victims of his scheme. The
agreement was part of a July case brought by the U.S. Commodity Futures
Trading Commission (the CFTC).