Guilty: Scam artist gets 30 years

Fourteen months after he was initially arrested, J.V. Huffman Jr. pleaded guilty Monday to a Ponzi scheme that affected hundreds across the region.

Huffman, 46, pleaded guilty to 14 counts of felony obtaining property by false pretense and 14 counts of felony securities fraud. Judge Robert Bell sentenced Huffman to 30 years in prison.

Huffman lied to neighbors, family and friends for 17 years, telling them he bought and sold securities at a high interest rate as he took millions of dollars from them to pay for his lavish lifestyle. Up to 500 people invested $25 million with his company, Biltmore Financial Group Inc., beginning in 1991 and ending Nov. 7, 2008, with his arrest.

Many of those victims were at Huffman's court hearing on Monday, as well as several of his family members who came to support him. As a security measure, everyone had to pass through an additional metal detector prior to entering the courtroom.

Prosecution's background on Huffman

Prosecutor Eric Bellas maintained that Huffman was a well-educated man who couldn't make it professionally. A graduate of Lenoir-Rhyne College, Huffman started his own business in Charlotte, which failed after a year. Huffman was then let go from a job in Charlotte, Bellas said.

While being interviewed after his arrest on Nov. 7, 2008, Huffman said he wanted to make his family proud because he had failed twice. Huffman's first client in 1991 was the estate trust of someone who died in a car wreck.

"Mr. Huffman said he would invest the money, but instead, he used it to pay off his credit card," Bellas said.

After that first client, others followed.

"No mortgages had ever been bought or sold," Bellas said. "He'd made up the scam to keep it from unraveling. Biltmore Financial had been his only source of income since at least 1994."

Bellas said some of Huffman's extravagance included owning a home with a tax value of more than $700,000 and a motor home that costs $2 million new. Huffman also owned nine time-share interests at Disney, a $280,000 condo in Boone and nine cars and trucks, including a 2008 Aston Martin.

Huffman's remorse

Huffman apologized for taking money from his friends and family, and told the courtroom "it's been a tough 14 months."

"I'm not here to make excuses," he said. "I've been wanting from the very beginning to step up and take responsibility for it. I certainly want to say I'm sorry, but I feel it's inadequate."

Huffman said the Ponzi scheme has been "a huge beast" in his life, something that got out of control. He said it started because he didn't want to admit his failures.

Huffman also maintained that although he took money from his friends and family, he is still a Christian man, and he still has morals and values.

"It's so hard for them to understand that this man can do all this and be a lover of his community and a lover of man and a lover of God," Huffman said. "This sin is in my life and no where does God say that man is immune to sin, and I am a Christian."

He also said that if the Ponzi scheme had not ended in his arrest in November 2008, he was not sure he would have lived out the rest of the year, saying it was killing him, physically and spiritually.

"These folks have lived with it 14 months, but I've lived with it 18 years," Huffman said, adding that he wished the victims could "be made whole again."

He added that his wife, children and secretary knew nothing of his financial dealings, and should not be punished for it.

Victims' disappointment

Most of the victims knew Huffman for many years. Several were referred to Huffman by someone else, or they themselves referred Huffman to someone they knew. Although many questioned if their money was insured, Huffman assured them that their principle investment would be safe. Huffman said he had a life insurance policy of several million dollars in case something happened to him, and also told investors that the FDIC and Thrivent Financial insured their investment, Bellas said.

Huffman's guilty plea to 14 two-count indictments stems from securities fraud of eight couples and six individuals. Between them, they invested nearly $3 million with Huffman from November 2003 to November 2008. More than half of them invested with Huffman in 2007 and 2008.

On Monday, they got to tell Huffman how they've been affected by his deceit.

Many said Huffman had taken away their sense of security and that they have trouble trusting other people. Several also said they have no money for retirement.

Most said they had researched Huffman's business as best they could before investing with him.

Martha Fox said she had to cancel her health insurance and refinance her home to get by.

Vickie Drum, who is also a relative of Huffman's, invested the least out of the 14. She said that shouldn't mean she matters any less.

"I didn't have as much money as everyone else, but it was all I had, and I should have been able to spend it as I wanted," Drum said, her voice thick with tears. "I know Junior was not brought up this way. One of the worst things is he took advantage of his own family and close friends."

Janie Sharp said she felt sick when she heard Huffman was arrested. The money she and her husband gave to Huffman was to be used to buy a house. Janie said she again felt sick when she attended the auction of the Huffmans' possessions in August 2009.

"It was depressing to see how he had wasted money," she said. "He bought things not because he needed it, but just to spend it. How could he steal with no remorse?"

Shirley Moore lost her retirement, insurance and home in the Ponzi scheme.

"The reality is that my investment is lost and time is not on my side to recover from the financial devastation," Moore said.

Huffman's defense

Peter Anderson, one of Huffman's attorneys from Anderson Terpening in Charlotte, called Huffman's actions "a tragedy on all levels." Anderson said Huffman wanted to plead guilty to all charges to bring closure for everyone.

Walt Pettit, the receiver appointed in the civil case, testified on Huffman's behalf, stating Huffman had always been forthcoming with information about his finances. Pettit said he and Huffman went through information on personal property, brokerage accounts, bank accounts and life insurance matters, and that Huffman was truthful on all of it.

When Bellas cross-examined Pettit, he grilled him on receivership matters, quizzing him about how much Pettit has recovered for investors and how many investors had filed claims for compensation — 364. Investors also learned that Gilda, Huffman's wife, and their children were allowed to take clothes, toys and personal items from the home.

The final person to testify for Huffman was his wife of 24 years, Gilda. She came to court with three of her children, who are 21, 13 and 11. The second-oldest child didn't come, Gilda said, because she doesn't want to have a relationship with her parents.

Gilda testified that she met Huffman in seventh grade. They went to college together and got married in 1985. She testified that Huffman volunteered with many organizations.

She said she noticed Huffman acted differently the last few years.

"He was distracted, sometimes irritable, he would lose his temper with me and the children," Gilda said. "He had trouble sleeping, especially the last month."

Now, Gilda visits him once a week for 15 minutes at jail through a video monitor. She said she has no plans to divorce Huffman.

"Our vows say for richer or poorer, 'til death do you part," Gilda said.

During Bellas' cross-examination, Gilda said she is also now living with Huffman's parents, who have taken her in with her two children who live at home. Gilda said she has a job doing some cleaning, and during the summer she cleans pools, though not for Huffman's father's company. Gilda said the last time she worked prior to November 2008 was in February 1998.

Bellas also asked her how much she gave to the church she and Huffman attended. Gilda said she made a donation each Sunday, and that Huffman donated $5,000 a month, as well as an additional $15,000 to the building fund. Gilda said Huffman also donated to at least seven other ministries and charities.

Gilda also testified that although she and Huffman went to the Caiman Islands and to the Caribbean several times on vacation, she never opened a bank account, and to her knowledge, Huffman didn't, either.

Sentencing

Huffman's attorneys asked for eight to 12 years.

The prosecution asked for 78 to 104 years, the maximum sentence.

The judge said he isn't frequently at a loss for words, but in this case he was.

"These are good, honest, hard-working people who worked their entire lives," Bell said to Huffman. "You had every opportunity. You didn't have to work in a mill for 40 years, and there aren't one, two or 10 (victims), there are hundreds."

Bell said it is also not just one generation that's affected, but up to three that could feel the effects of what Huffman's done. After sentencing Huffman to 30 years, Bell gave him some advice for his time in prison.

"I hope that every day of those 30 years, you think of those people who had their money taken from them," Bell said.

He also recommended Huffman for work release.

Drum was still choked up after Huffman's sentence.

"He got more than what I was expecting," she said. "I think it was fair. I like that he's eligible for work release."

Investor Linda Eckard initially thought Huffman should work in prison 12 to 15 hours a day to pay back the money he owes the victims. However, after hearing the sentence, she thought it was just.

Huffman's attorneys said they were disappointed with the sentence.

"I don't think it took into account his positive aspects," Anderson said.

District Attorney Jay Gaither said he was pleased it wasn't 12 years, but wished the judge had given a sentence closer to the 70 years the prosecution asked for.

Gaither said he has not ruled out additional counts against Huffman in the future.