Charlotte man ordered to pay $2.1 million for Ponzi scheme
03/24/2014 6:24 PM
03/24/2014 11:44 PM
A Charlotte man has been ordered to pay a $2.1 million civil penalty for operating a Ponzi scheme that bilked clients out of about $3.2 million.
A federal judge for the Western District of North Carolina entered the order requiring Mitchell Brian Huffman to pay the penalty, the U.S. Commodity Futures Trading Commission announced Monday.
About three years ago, Huffman pleaded guilty to one count of commodities fraud in connection with the $2.5 million Ponzi scheme that prosecutors say he orchestrated from 2006 to 2011.
In January 2013, Huffman was sentenced to serve five years in prison, followed by three years of supervised release.
Federal authorities say Huffman ran a fraudulent operation involving exchange-traded commodity futures contracts. Authorities claim Huffman asked mainly family and friends to allow him to buy and sell exchange-traded commodity futures contracts on their behalf.
Huffman falsely told his victims that he was generating annual rates of return of 100 percent to 150 percent using a proprietary trading program, authorities said. Through the scheme, he raised about $3.2 million from 30 participants throughout the U.S.
Unknown to his victims, Huffman used the money he raised to fund a lavish lifestyle, authorities said, including expenses of about $71,255 on his classic car collection, approximately $188,583 on personal travel and luxury vacations and about $51,540 in charitable contributions in his name.
Authorities said Huffman admitted his participation in the Ponzi scheme to special agents of the Charlotte FBI office after he could no longer sustain the operation. He pleaded guilty to the operation in September 2011.
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