US Regulator Secures Prison Sentence Against Ponzi Scheme Operator Who Fled Overseas

A US federal court has sentenced investment fraudster Matthew Melton to 51 months in prison for operating a multi-million-dollar Ponzi scheme that falsely promised high returns through a non-existent algorithmic trading strategy, marking another enforcement action in the country's crackdown on financial crime.

According to the US Attorney's Office for the Southern District of New York, Melton promoted an investment programme known as Price Physics, claiming it used a proprietary algorithm to trade futures contracts and guaranteed investors returns of up to 12% per month. Prosecutors said the trading strategy never existed, and that investor funds were instead diverted to cover Melton's personal expenses and repay earlier investors in a Ponzi-style scheme.

Authorities said Melton fled the United States in December 2020 after learning he was under criminal investigation, remaining a fugitive for nearly three years before being arrested in the UK in 2023. He was extradited to the US in late 2025 and pleaded guilty to securities fraud in April this year.

Alongside the prison sentence, the court ordered Melton to forfeit more than US$3.75 million in proceeds linked to the fraud, while restitution for investors will be determined separately.

The case forms part of broader US enforcement efforts targeting investment fraud and securities violations. US Attorney Jay Clayton said authorities remain committed to pursuing individuals who defraud retail investors, noting that the office has significantly expanded its financial crime enforcement actions, including cases involving corporate executives and insider trading.

The investigation was conducted by the FBI with assistance from the US Securities and Exchange Commission (SEC).