Two North Carolina Men Sentenced in Separate Ponzi Schemes

Two North Carolina men received prison sentences for their role in two separate commodities-based Ponzi schemes that bilked investors out of millions of dollars.  Mitchell Brian Huffman, 52, received a five-year sentence for orchestrating a $2.5 million Ponzi scheme, while Robert S. Moss, 49, received a 57-month term for his $1.5 million scheme.  Each man had previously pled guilty in September 2012 to a single count of commodities fraud, which carries a maximum potential sentence of twenty-five years.  

According to authorities, Huffman solicited potential investors by promising extraordinary annual returns sometimes exceeding 100% by using a proprietary trading program to trade in commodity futures markets.  Investors were directed to transfer funds into Huffman's personal bank account, and in turn provided with monthly statements showing consistent trading profits.  In total, from 2006 to March 2011, Huffman raised more than $3.2 million from 30 victims.  However, Huffman used less than half of this amount to engage in actual commodities trading, and suffered massive trading losses.  Huffman also used investor funds to make Ponzi-style interest payments and for a variety of personal expenses that included luxurious vacations and charitable contributions.

Robert Moss also sought to lure investors by promising consistently above-average returns as the result of options trading in the commodities futures market.  Beginning in 2001, Moss told potential victims that he had not had a losing year trading since 1993, and generated market-beating annual returns ranging from 22% to 41%.  Investors were also assured that none of Moss's investors had ever lost capital, and that Moss kept liquid capital on hand that exceeded his tradeable assets by a factor of three.  Based on these representations, twenty-two investors entrusted more than $3 million with Moss.

However, Moss was not the astute commodities trader he portrayed himself to be.  Instead, Moss lost hundreds of thousands of dollars in investor funds.  To conceal these losses and maintain the appearance of his investing prowess, Moss instead made interest payments to investors that were, in reality, derived from investor funds.  Total investor losses were estimated at $1.5 million.

Both of the men were also ordered to pay restitution, with Moss ordered to pay $1.46 million and Huffman's amount to be determined at a later date.