STATESVILLE, N.C. (CN) - The CEO of Biltmore Financial Group suckered investors for $25 million in a 17-year Ponzi scheme that intensified after Sept. 11, 2001, the SEC says. It claims Joshua Huffman misrepresented Biltmore as a mutual fund, and after Sept. 11 as a mortgage pool. He allegedly targeted Lutherans in his hometown, and used their money to buy an Aston Martin convertible, a $1 million RV and fancy homes.
Huffman, 45, of Claremont, N.C., has run Biltmore since 1991. It is not registered with the SEC. The commission also sued his wife, Gilda Bolick Huffman.
Huffman told his first suckers that Biltmore "operated like a mutual fund," but to assure them that they were "safe from market volatility" after Sept. 11, he claimed the company "generated profits by pooling investor funds to buy and sell mortgages," the SEC says. It says both claims were "wholly fraudulent."
Huffman is accused of taking more than $25 million from more than 500 victims around the country. He claimed their money was insured by the FDIC, and made up impressive annual financial numbers, the SEC says.
The scheme collapsed on Nov. 7 when state securities investigators executed a search warrant on Huffman and Biltmore. "Huffman then confessed that he never invested the funds as represented to investors, used new investor funds to pay profits to earlier investors, and used funds for his extensive personal purchases," the SEC said in a statement. It seeks an order freezing assets, an injunction, and other relief.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.