Two Men Admit to Two Separate Ponzi Schemes on Same Day in Charlotte Court
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).