Two North Carolina men entered guilty pleas to carrying out separate Ponzi schemes based on purported commodities trading operations. Brian Huffman, 51, and Robert S. Moss, both of Charlotte, each pled guilty to a single count of commodities fraud before a magistrate judge in the Western District of North Carolina. As a result of the guilty plea, the men each face a maximum statutory sentence of twenty-five years in federal prison and up to a $250,000 fine. The government is also seeking forfeiture of any assets acquired with proceeds obtained through the fraud.
Authorities charged Huffman in August 2011 with operating a Ponzi scheme that raised approximately $3.2 million from thirty victims. Huffman solicited potential victims by advertising above-average returns through the execution of an elaborate commodities trading operation. Huffman used less than 50% of investor funds in trading and suffered massive losses, using the remainder of investor funds to pay interest and create the appearance that the operation was generating profits. Investors were supplied with fictitious account statements that falsely showed steadily growing account balances. Funds were also used to purchase luxury vehicles and fund vacations.
Moss was also charged in August 2011 with operating a commodities-based Ponzi scheme that defrauded investors out of approximately $1.5 million. According to authorities, Moss solicited more than $3.1 million from twenty-two investors, falsely representing that he was generating stable profits through options trading in the commodities futures market. Investors were told that Moss had not sustained a losing year since 1993, and that annual returns would range from 22% to 41%. In reality, Moss sustained heavy losses while trading, and used new investor funds to pay returns to existing investors.
Authorities have not yet set sentencing dates for Moss or Huffman.
Ponzitracker previously covered a settlement between Moss and the Commodities Futures Trading Commission (CFTC) here.