Music Producer, Charles Huggins, Convicted in $2.1 Million Ponzi Scheme

The ex-husband of soul singer Melba Moore was recently convicted for his part in a $2.1 million Ponzi scheme.  The 68-year old, Charles Huggins, a music producer who’s worked with stars like Whitney Houston and Tom Cruise, is currently being held behind bars until his sentencing in January 2015.

According to reports, Huggins, Charles Butchko, and Anne Thomas were charged with fraudulently acquiring investments for gold and diamonds purportedly mined in West Africa for sale in the U.S.  In February 2013, the FBI arrested Huggins and Thomas in Edgewater, New Jersey, and Cliffside Park, New Jersey. Butchko was taken into custody in Murrieta, California.

From as far back as 2005, the FBI says the three defendants solicited as much as $2.5 million from investors through two companies, JYork Industries and Urogo Inc.  Huggins and Butchko would repeatedly make presentations on how they would mind for gold and diamonds in Sierra Leone and Liberia, then promise high returns based on profits made from U.S. sales.

Huggins, Butchko, and Thomas misappropriated the majority of the money they raised and kept it for themselves or used it to repay other investors. For example, investor funds were diverted to Orpheus Inc., a record label owned by HUGGINS, and VASNC Pvt Ltd., a petroleum company owned by BUTCHKO, and used to pay monthly apartment rental payments, restaurant bills, personal credit card bills, and other expenses. THOMAS personally received more than $90,000 in cash and disbursed more than $830,000 in investor proceeds through wire transfers to the Bahamas and checks repeatedly issued in amounts less than $10,000 in an apparent attempt to avoid the reporting threshold. Contrary to the defendants’ representations, only a small portion of the money they raised was transferred to Africa.

When investors complained that they had not received the return on their investment that they were promised, HUGGINS, BUTCHKO, and THOMAS frequently converted or offered to convert their investment into restricted shares of Oraco Resources, a publicly traded company of which HUGGINS, BUTCHKO, and THOMAS were majority shareholders. The investigation has revealed that only one investor to date has been made whole. That investor received the principal of his investment only after he threatened to bring civil litigation. (via RadioFacts.com)

Huggins and Butchko were each convicted of one count of conspiracy to commit wire fraud and one count of wire fraud. Each carry a sentence of up to 20 years and up to $250,000 in fines. Thomas received a conviction of one of count of conspiracy to commit wire fraud and one count of money laundering. Each carry a sentence up to 20 years and up to $500,000 in fines.