Elway loses $15M!

[rcsodak]

He and his business partner wired $15M to an investor. Telling him to hold it until they decided where to invest it. Problem was, dude was in the hole with only $9M in assets and $40+M in liabilities. Enter PONZI!
OUCH!
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[Shazam!]

That sucks.

[Denver Native (Carol)]

http://www.denverpost.com/business/ci_16323119?source=email

Former Denver Broncos quarterback John Elway was among about 65 investors named Tuesday in a criminal case against former hedge-fund manager Sean Mueller of Cherry Hills Village.

The Denver district attorney's office did not disclose the amount that Elway invested. Elway's agent and spokesman, Jeff Sperbeck, declined to comment.

Denver DA Mitch Morrissey charged Mueller, 42, on Tuesday with violating the Colorado Organized Crime Control Act, securities fraud and two counts of theft.

A warrant was issued for his arrest, and arrangements were being made for him to surrender. Arraignment was scheduled for Friday morning and bail set at $2 million cash.

Mueller's attorney, Rick Kornfeld, said his client continues to cooperate with investigators.

Authorities called the case a classic Ponzi scheme in which Mueller allegedly lured new investors to pay off old ones, with investors' total losses in the "tens of millions of dollars."

One place Mueller may have attracted investors was on the golf course. He belonged to top-tier country clubs in the south suburbs as well as in the Phoenix area, where he and his family lived a few years ago.

The list of Mueller's investors includes former Janus Fund manager Blaine Rollins, several company owners and a corporate chief executive. Many are from the Denver and Phoenix areas.

In total, about 65 people invested roughly $71 million since 2000 with Mueller and his company, Mueller Capital Management, according to an affidavit filed by the DA's office.

Mueller had less than $9.5 million in cash and investments in April and liabilities to investors of $45 million, Colorado Division of Securities investigator Richard Rogers said in the affidavit.

The state has said that Mueller raised more than $20 million from three investors, including a $15 million client who signed on in March.

Police took Mueller into custody April 22 after he sent apologetic messages to investors and threatened to jump off an RTD parking garage in Greenwood Village. He was hospitalized and later released.

Mueller had told an employee that his funds had "lost money from the start," Rogers said in the affidavit.

The state shut down Mueller's funds and seized his assets.

"Mueller used investor funds to live an extravagant lifestyle, which included the personal purchase and upkeep of three luxurious homes, several expensive cars, daily personal living expenses, and memberships in exclusive country clubs," Rogers said in the affidavit.

Mueller and his family lived in a large Tudor-style home in Cherry Hills Village, and his cars included an S-class Mercedes-Benz.

[KCL]

I just got through reading about this...that does suck for him and the others.
Said the guy was gonna commit suicide(should have)..what a fool..did he really think he would get by with what he did?

[The Glue Factory]

All Ponzi schemes eventually crumble under the weight of bringing new money to payoff older "investors". Hopefully we can get Hedge Funds to be more regulated than they are. Currently they have much lighter registration requirements than other investments like stocks and mutual funds.

Speaking of Ponzi schemes using new money to payoff old investors, doesn't that sound like how Social Security works?

[FanInAZ]

I just got through reading about this...that does suck for him and the others.
Said the guy was gonna commit suicide(should have)..what a fool..did he really think he would get by with what he did?

The key is for them to know when to catch a flight to a country that we have no extradition treaty with before law enforcement catches on. The Cayman Islands comes to mind. Not that I have any such plans myself, but that what those who get away with it do.

[OrangeHoof]

Speaking of Ponzi schemes using new money to payoff old investors, doesn't that sound like how Social Security works?

No, in a ponzi scheme, the investor actually agrees to be hosed. The Social Security "investor" simply has it stolen from him.

[MileHighCrew]

Sadly I will never be in a position to lose $15 M

[Superchop 7]

I doubt Bowlen invested.

John, you should listen to good advice from Pat and no one else.

[Ottokar Prohaska]

Hedge funds are a logical place to run a Ponzi scheme since they are less regulated. Since they are less regulated, the good ones take more risks and have better return than a traditional Mutual Fund. Any of these ripoffs rely on greed by promising oversized returns. I am surprised that anyone is buying into them anymore since Madoff was just one of many.