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U.S. Securities and Exchange Commission

Biltmore Financial Group, et al.

On November 12, 2008, the SEC obtained permanent injunctions, an asset freeze and other relief against J. V. Huffman, Jr. and Biltmore Financial Group, Inc., a North Carolina corporation controlled by Huffman, in connection with an alleged Ponzi scheme. According to the complaint, since 1991, the defendants raised at least $25 million from more than 500 investors in North Carolina and several other states. The SEC alleged that Huffman told investors Biltmore would operate like a mutual fund, promising profits that would fluctuate at market rates and that were guaranteed “never to drop below 0%.”

The SEC also alleged that after September 11, 2001, to assure investors that their investments would not be affected by the volatility of the stock market, Huffman represented that Biltmore pooled investors’ funds to purchase and sell mortgages for a profit, and that their investments were protected against loss. According to the complaint, Huffman failed to invest client funds as represented and used new investor funds to pay profits to earlier investors.

The complaint also alleges that Huffman spent investor funds to subsidize his lavish lifestyle and that his wife, Gilda Huffman also received benefits from the fraudulent scheme.

For more information about the SEC’s action, you can read Litigation Release No. 20807 (Nov. 13, 2008).

The Court appointed Walt Pettit as Receiver. For more information about the Receivership, you can visit the Receiver’s website.


Modified: 12/22/2008