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HONOLULU (CN) - A criminal serving time for wire fraud and money laundering ran a $3 million Ponzi scam from his prison cell, the Commodity Futures Trading Commission claims in Federal Court.

The CFTC claims that Perry Jay Griggs, aided by his wife, "succeeded in soliciting over $3 million in investments ... of which they misappropriated approximately $1 million for personal uses, including payments for luxury car leases, the rental of a home in Hawaii, the purchase of jewelry, and the chartering of a private jet."

The CFTC sued Griggs, his wife, Rachelle Griggs, and Aloha Trading Co. The Griggses used $1.1 million of the money to make Ponzi payments, according to the complaint.

"This scheme began while Perry Griggs was serving a federal prison sentence for wire fraud and money laundering," the CFTC says. "While incarcerated on these criminal charges, Perry Griggs solicited investments from fellow prisoners while his wife, Rachelle Griggs, solicited investments from families or prisoners and other members of the general public. ...

"Perry and Rachelle Griggs both claimed that Perry Griggs was an expert commodity trader and that participants' funds would be used to trade commodity futures. In fact" - hard as this may be to believe - "he was not an expert commodity trader," the CFTC says.

Griggs does, however, sound like a very persuasive fellow: "Both individual defendants convinced many of the individuals they solicited to refinance their homes and invest the proceeds with defendants. Other participants liquidated retirement accounts and invested with defendants."

The Griggses lost 83 percent of the money they did invest in futures contracts, stole some for themselves, and lost more of it on "other unsuccessful business ventures," according to the complaint.

The CFTC seeks restitution, disgorgement, penalties and injunctions.

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