Yesterday, we told youJohn Elway was among the investors allegedly scammed by accused Ponzi schemer Sean Mueller
Now comes news that Elway and a partner invested $15 million a month before Mueller reportedly tried to commit suicide -- an act that led to his unmasking.
First, some background courtesy of the Sean Mueller arrest warrant and charging documents made available by the Denver District Attorney's Office.
According to the supporting affidavit, Mueller formed a company called Mueller Capital Management in 2000, with another hedge fund following. As part of his operation, he employed two accountants, Bill Saetveit and Bill Schaefer, who were listed as minority interest holders in MCM.
But everything came apart in a very public way on April 22, when the Greenwood Village Police Department responded to a report of a man -- Mueller -- threatening to commit suicide by jumping off an RTD parking garage. He was subsequently taken into protective custody, but not before he told another employee, Ian Baker, "the funds that Mueller had been operating had 'lost money from the start,'" the affidavit maintains.
Mueller had also sent out an e-mail to employees in which he said "he was sorry for what he had done and that he was going to commit suicide," the document states. The e-mail read:
Nobody here or anywhere else had any idea what was happening. Nobody here or either Bill Sateveit or Bill Schaefer. I think you can redo the taxes and recover a good amount of money. Nobody except myself had any access to the statements.
Sometimes life stresses overwhelm a person to the point where they can't go on. The confusion has finally won its battle with me and I feel like there are no good options left. I always thought I could make it back but that's not going to happen.
This e-mail and other evidence prompted an investigation capped by assorted charges against Mueller, including racketeering; he was taken into custody yesterday morning and is expected to make his first court appearance tomorrow. Meanwhile, the indictment listed 65 investors -- Elway among them -- who were allegedly screwed out of a cumulative $71 million by Mueller's scheme, but didn't specify loss amounts for any of them.
Now, however, the Denver Post has reportedly obtained a motion filed by Elway and partner Mitchell Pierce on Tuesday revealing that they gave Mueller around $15 million in March.
Considering that Mueller reportedly has assets of $9.5 million compared to liabilities of $45 million, it's reasonable to surmise that this cash infusion was the equivalent of a Hail Mary pass. When it fell incomplete weeks later, he likely inched to the edge of desperation -- and almost over.
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Page down to read the entire affidavit and charging material, as well as a Denver District Attorney's Office release detailing the counts Mueller is facing.
Denver District Attorney's Office release:
MAN CHARGED IN PONZI SCHEME
Denver District Attorney Mitch Morrissey has formally charged a hedge fund manager with racketeering and other felony counts today.
Sean Michael Mueller (dob: 08-31-68) is charged with violating the Colorado Organized Crime Control Act (COCCA) (F2), securities fraud (F3) and two counts of theft (F3).
The charges allege that over the last ten years, Mueller knowingly used new investor funds to pay existing investors, failed to deposit investor funds in brokerage accounts as promised, created phony monthly account statements and created phony brokerage statements to hide his scheme.
The charges are the result of an investigation by the Colorado Division of Securities with assistance from the U.S. Secret Service. "This is an important example of how agencies can work together to protect investors in Colorado," said Colorado Securities Commissioner Fred Joseph. The investigation identified approximately 65 investors estimated to have lost tens of millions of dollars.
An arrest warrant has been issued for Mueller, and arrangements are being made for his surrender. His bond is set at $2,000,000 (cash only). He is scheduled to appear in Denver District Court 5H on Friday, October 15, 2010 at 8:30 to be formally advised of the charges.