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More than 300 investors express outrage, frustration at meeting

NEED MORE HELP?

Investors can go to the Secretary of State’s Web site at www.sosnc.com for information to avoid investment scams and to check on stockbroker and investment adviser registrations.

WHAT'S A PONZI SCHEME?

Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors he could provide a 40 percent return in just 90 days, compared with 5 percent for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period — and this was 1921. Though a few early investors were paid off to make the scheme look legitimate, an investigation found Ponzi had only purchased about $30 worth of the international mail coupons.

Decades later, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

source: www.sec.gov/answers/ponzi.htm

Do you know J.V. Huffman, Jr?

Do you know J.V. Huffman, Jr? Were you a client? Contact us at 828-322-4510 or e-mail us at news@hickoryrecord.com.

By Sarah Newell Williamson | Hickory Daily Record

Published: November 13, 2008

A visibly frustrated Sandra Porter attended a meeting Wednesday night for people who invested in the now-defunct Biltmore Financial Group Inc. She left the same way.

Porter and her husband joined more than 300 investors at St. Peter's Lutheran Church to learn what could be done about the money they invested in Biltmore Financial Group with J.V. Huffman Jr.

Representatives from the district attorney's office, the N.C. Secretary of State's office and the U.S. Securities and Exchange Commission attended the meeting.

"I want to know why they didn't put the accelerator on the investigation when they first suspected he might have been doing something?" Porter said. "If they first started looking into this in February or March, why didn't they do something then? It could have saved a lot of people a lot of money. I bet he got another 75 or 80 clients this year."

Eric Bellas, with the district attorney's office, assured the group the investigation into Huffman's actions is continuing and he faces criminal and civil charges.

Huffman was charged with four counts of securities fraud. He could face more charges, according to the N.C. Secretary of State's office. Huffman's civil suit will play out in federal court, and is being brought by the Securities and Exchange Commission.

"We've filed a lawsuit against Mr. Huffman and the Biltmore Group, and his wife is a relief defendant," said Bill Dixon, with the SEC. "That means she's not named, but we allege she has gotten proceeds.
The defendants are not fighting us on this lawsuit. We have appointed a receiver, and his job is to locate and ID all assets."

A receiver is appointed to preserve the property when litigation has been brought against a person or when property might be lost or removed without the receiver.

Dixon described Huffman's business as a typical Ponzi scheme. These schemes follow the "rob-Peter-to-pay-Paul" principle. He said although the receiver would try to distribute the assets fairly, investors should be prepared to suffer a loss.

Porter's husband, Richard, was concerned about the upkeep of Huffman's home. If it deteriorates with no one living there, so, too, does their investment.

"My major concern is the preservation of property, so we can recoup our money," he said.

Huffman's secretary, Tameria Smith, also spoke. She said anyone who thought she knew what Huffman was doing was mistaken. Between she and her husband, their parents and extended family, they invested more than $1 million in Huffman's company. As the wife of a pastor, Smith said she thought he used her as a cover.

"I worked sometimes an hour a week, sometimes five hours a week. My job consisted of writing numbers on a piece of paper and putting a check in a box for Mr. Huffman," Smith said. "I never knew anything about the business, other than what he told client after client. I assumed that's what he did, and never questioned that."

Now she's in the same position as many others in the surrounding area.

The SEC receiver will establish a Web site in the coming days with information about the situation.