A music producer who once worked with superstars Kenny G and Whitney Houston was convicted by a federal jury of operating a Ponzi scheme that promised lucrative returns through trading in precious metals including gold and diamonds. Charles Huggins, 68, was convicted on one count of wire fraud and one count of conspiracy to commit wire fraud. Huggins faces up to twenty years in federal prison on each count, as well as criminal fines of $250,000 or twice the gross gain or loss caused from the offense. U.S. District Judge Sidney Stein ordered Huggins to be jailed until his January sentencing based on his heightened flight risk and connections to African officials.
Huggins operated several companies including JYork Industries Inc. (“JYork”) and Urogo Inc. (“Urogo”). Beginning in 2008, Huggins solicited potential investors by promising that their funds would be used for the mining of gold and diamonds from the African countries of Sierra Leone and Liberia, and that the extracted stones would then be sold in the United States at a significant profit. In total, Huggins and his companies raised more than $4 million from several dozen investors.
However, Huggins used very little of investor funds for mining precious metals in Africa. Rather, investor funds were used by Huggins for a variety of undisclosed personal purposes, including monthly rent for a $7,200 Manhattan apartment, Mercedes car payments, and doting on an aspiring young actress who called Huggins "daddy." Additionally, money was also diverted to companies owned by Huggins' co-conspirators, Christopher Butchko and Anne Thomas. The three were arrested on fraud charges in February 2013, and FBI agents later located $35,000 in cash-stuffed envelopes and approximately $1,000 smaller diamonds in a safe-deposit box.
A copy of the criminal complaint is below: