CHARLOTTE, N.C. – Yesterday, Senior U.S. District Judge Graham Mullen sentenced a Huntersville man to 30 months in prison for his role in a securities fraud scheme involving fraudulent bonds, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Charles Edwin Abrams, a.k.a Charles Edwin Klutz and Charles Edwin Donovan, 53, was also ordered to serve two years under court supervision after he is released from prison, to pay $828,284 in restitution to victims, and to undergo mental health treatment.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Rose in making today’s announcement.

According to information contained in filed documents and yesterday’s sentencing hearing, Abrams and his co-conspirator, Mark Burgin, engaged in a securities fraud scheme by promoting a fraudulent investment known as the Mexican “Pink Lady” Bonds (bonds).  Court records indicate that Abrams induced his victims to invest in the fraudulent bond scheme by making numerous false and fraudulent claims about the value of the bonds and the anticipated return on the victims’ investment.  For example, according to court records, Abrams told potential investors that the bonds were issued in 1899 by the “United States of Mexico,” that the bonds had a value of 5% interest compounded daily, and that victim investors would receive billions of dollars upon the sale of the bonds.  Court records also show that, in furtherance of the conspiracy and to bolster the fraudulent scheme’s credibility, on at least two occasions Abrams introduced Burgin to potential victim investors as a former Special Agent with the FBI.  Abrams also represented himself to be a former U.S. Navy SEAL, when in fact he never served in the military.

According to court records, Abrams induced a total of seven known investors to invest $828,284 in the fraudulent bond scheme.  Instead of purchasing the bonds with the investors’ funds as promised, the co-conspirators used the money for their personal benefit, including the purchase of luxury vehicles, jewelry, and to pay off investors from previous fraudulent schemes.

During the sentencing hearing, one of Abrams’ victims addressed the Court and spoke of the devastating financial impact she has suffered as result of the scheme, including not being able to retire and that she “no longer trusts anyone.”

Abrams pleaded guilty in May 2016 to one count of wire fraud conspiracy and one count of securities fraud conspiracy. He will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was led by the FBI.  Assistant United States Attorney Kenneth M. Smith, of the U.S. Attorney’s Office in Charlotte prosecuted the case.