Investment Manager Extradited in Alleged Ponzi Scheme

BROOKLYN — Federal prosecutors last week said Matthew Melton, 61, of Boulder, Colorado, has been extradited from the United Kingdom to face securities fraud and wire fraud charges tied to an alleged Ponzi scheme marketed as an “algorithmic trading” fund.

According to the U.S. Attorney’s Office for the Southern District of New York, Melton raised millions of dollars through his fund, Price Physics, by falsely claiming it used a proprietary algorithm to trade futures contracts and deliver guaranteed monthly returns of up to 12%. Prosecutors allege there was no such algorithm and that investor funds were instead used to pay earlier investors and bankroll Melton’s personal expenses, including mortgage payments and sailing trips.

Melton arrived in the United States on Dec. 19 and was presented the following day before a magistrate judge. He has been held at the Metropolitan Detention Center in Brooklyn pending further proceedings and was scheduled to make his initial appearance on Sunday. The case is assigned to U.S. District Judge Arun Subramanian.

U.S. Attorney Jay Clayton said the scheme relied on “one of the oldest scams around,” while the FBI said the alleged fraud caused millions in losses. Melton faces up to 20 years in prison on each count.

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