North Carolina Operator of Phony $3.2 Million Commodity Pool Scheme Charged of Fraud

North Carolina Operator of Phony $3.2 Million Commodity Pool Scheme Charged of Fraud

Charlotte, NC – Mitchell Brian Huffman, a Charlotte – based operator of a commodity pool scheme that promised high investment fraudreturns using a “proprietary trading program”, has been charged by the CFTC with fraud regarding exchange-traded commodity futures contracts.

Huffman, who never registered with the CFTC, solicited an amount of about $3.2 million from about 30 investors, who were mostly friends and family, with the understanding that the amount would be used to trade exchange-traded commodity futures contracts on their behalf, according to the CFTC charges. Huffman apparently contacted the investors via phone or in person to solicit the funds, but misled them regarding the likely profits and the inherent risks in the scheme.

According to CFTC’s complaint, the pool participants entered into “sponsorship agreements” with Huffman on February 7, 2012, authorizing him to trade the futures on their behalf, under the false impression that he would be using a proprietary trading program to generate profits of 100 to 150 percent and that a fee of 20 percent would be paid out of the profits to Huffman for his services – the CFTC claims that these profits and the promised rates of return were all false and fabricated.

Huffman apparently also used clients’ money on various personal expenses such as expensive cars including classic cars, personal travel junkets and charitable donations in his own name. On one occasion he invited several clients on a luxury vacation in Hawaii, telling them it was a celebration of his silver wedding anniversary, giving the impression that he was paying for the trip when actually he was utilizing the clients’ funds.

Once the scheme started to unravel, Huffman informed the FBI office at Charlotte, N.C. and then in September 2011, pleaded guilty to commodities fraud on one count.

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One Response to North Carolina Operator of Phony $3.2 Million Commodity Pool Scheme Charged of Fraud

  1. It wasn’t a scheme it was a mistake. Get your facts right! He turned himself in because it was the right thing to do!

    Anon
    May 29, 2014 at 11:29 am
    Reply

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