Uxbridge man accused of running Ponzi scheme
An Uxbridge man has been charged in an alleged Ponzi scheme that took in $3.5 million, according to a statement Tuesday from the office of Secretary of State William F. Galvin.
Charles L. Erickson is suspected of conducting a fraudulent Ponzi scheme in which he sold unregistered investments in trading futures contracts to at least 25 investors, the statement said. About a third of those recruited were from Erickson’s church in Ashland, where he was an elder, according to Galvin’s office.
The administrative complaint, according to the statement, said: “Erickson believed that the ‘Holy Spirit’ had given him a proprietary system for day trading a particularly volatile type of futures contract.” The suspect, the complaint added, pooled investor funds into online brokerage accounts “and began trading pursuant to his purportedly divine system.”
The complaint goes on to say that Erickson allegedly began collecting money from investors in 2010, promising guaranteed returns of 4 percent per month, or 96 percent over two years, according to Galvin's office. Erickson allegedly lured investors with spreadsheets showing favorable trading returns, but the numbers were hypothetical.
“Erickson never disclosed actual profits or losses to his investors,” the complaint states. “… Erickson’s investment scheme was a Ponzi scheme, which ultimately collapsed in 2014. Erickson admitted to the Enforcement Section (of the state Securities Division) that in the months when his system was not profitable, he paid monthly returns to investors using capital reserves deposited by later investors.”
Investigators found that, over a two-year period, only about $1.5 million of the $2.8 million Erickson raised was transferred to his brokerage accounts, while the remaining funds were kept in his checking account to pay returns to investors, Galvin’s office said.
The state’s complaint says that Erickson, who had limited trading experience, began in 2008 looking for ways to supplement his retirement income and chose E-Mini Russell 2000 futures contracts. He began investing his own money and in 2010 started taking money from others for his system.
Although he began to suffer trading losses in 2013, the complaint states, it wasn’t until October or November of 2014 that he told his investors “… I lost everything …”
Galvin’s office is seeking compensation to investors of all losses, as well as a permanent ban on Erickson from the securities business in Massachusetts.
An attempt to contact Erickson Tuesday morning was unsuccessful.
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