Bingo. Yesterday, Merriman pleaded guilty to one count of mail fraud and one count of asset forfeiture -- and he had plenty of assets to forfeit. The U.S. Attorney's Office accounting of his booty features nearly 400 pieces of art, a classic-car collection that included a 1930 Lincoln and what's referred to generically as "taxidermy."
Bet Merriman feels like he's been stuffed and mounted about now -- but that's nothing compared to the former clients who were fleeced. Get more details below:
U.S. Attorney's Office release:
SHAWN RICHARD MERRIMAN PLEADS GUILTY TO MAIL FRAUDDENVER -- Shawn Richard Merriman, age 46, of Aurora, Colorado, pleaded guilty this morning [December 2] to one count of mail fraud and one count of asset forfeiture, United States Attorney David Gaouette and U.S. Postal Inspector in Charge Shawn Tiller announced. The guilty plea was tendered before U.S. District Court Judge Marcia S. Krieger. Merriman, who appeared at the hearing in custody, was remanded. He is scheduled to be sentenced by Judge Krieger on May 10, 2010 at 8:30 a.m.
On April 8, 2009, U.S. Marshals and U.S. Postal Inspectors seized Merriman's assets as part of an ongoing investigation. Merriman was then charged by Information on August 19, 2009.
According to the Information as well as the stipulated facts contained in the plea agreement, from about June 1, 1994, through February 24, 2009, Shawn Richard Merriman devised and intended to devise a scheme to defraud investors by obtaining their money by means of materially false and fraudulent pretenses, representations, and promises. As part of the scheme, Merriman, operating under the names of Mountain Springs Partners, L.P., and the limited liability companies LLC-1, LLC-2, Marque LLC-3, LLC-4, and LLC-5, represented to investors that he would use their money to buy and sell securities and would return profits from such trading to them.
As part of the scheme, Merriman accepted millions of dollars from more than one hundred individuals and entities but failed to use a lot of that money to buy and sell securities, instead converting most of that money to his own use and benefit. Merriman made misrepresentations to the investors, including misrepresentations that he had used their money to buy and sell securities and that his trading resulted in profits for the investors. He included those misrepresentations in fraudulent account statements that he mailed. The defendant also responded to investors' requests for the return of the money that they had invested or the money that they believed they had earned by transferring to those investors money that he had received from others. Investors included members of his family, neighbors, acquaintances and others who were referred to him. In some cases investors used money from family trusts and individual retirement accounts.
Between about 1995 and about 2004, Merriman used some of the investors' money to buy and sell stock, although he did not often do so. He did not inform the investors of this and instead misrepresented to them that he had used their money to trade stocks and that the trading had resulted in profits. Beginning in about 2004, Merriman completely stopped trading. He nevertheless continued until February 24, 2009, to accept funds from investors and continued to misrepresent to the investors that he was buying and selling stocks and that their investments were growing.
Court documents further state that upon conviction, Merriman shall forfeit to the United States interests in all property constituting and derived from any proceeds that he obtained directly and indirectly as a result of the crime. A money judgment shall then be entered against Merriman in the amount of the proceeds obtained by him from such offense less the amount of funds recovered from assets and property that have already been forfeited, criminally or civilly, and that were directly traceable to proceeds obtained from the criminal conduct.
The government's position is that the victims who invested in Merriman's partnership and limited liability companies lost approximately $21,010,702.73 as a result of the scheme. The defendant reserved the right to challenge this figure.
"With today's guilty plea, the defendant has admitted to defrauding over 100 investors of millions of their hard earned dollars," said U.S. Attorney David Gaouette. "Some investors lost everything. Thanks to the hard work of federal prosecutors and Postal Inspectors working on this case, the defendant has been brought to justice and must now suffer the consequences of his illegal acts. Hopefully, there will be an opportunity for the victims to receive some compensation for their losses."
"Postal Inspectors have worked diligently to piece this investigation together," said U.S. Postal Inspector in Charge Shawn Tiller. "Fraud schemes, such as the one carried out by Shawn Merriman, victimize many honest and hard working individuals. Our Inspectors take pride in assisting these victims and making all efforts to see that persons who use the mails for criminal gain are caught and brought to justice. We are pleased with the work the U.S. Attorney's Office has done to bring this offense to a successful prosecution."
The following assets were seized from Merriman during the investigation.
Items seized include:
* 157 pieces of Old Masters Fine Art, located at Merriman's residence in Aurora
* 170 pieces of contemporary art, also located at Merriman's residence
* 43 pieces of framed fine art, 4 bronze busts, and one acrylic sculpture, located at Merriman's residence
* Merriman's residence, located in Aurora, Colorado
* Other real property, located in Island Park, Idaho
* Numerous conveyances, including vehicles, collectible cars, motorcycles, a boat, a motor home, trailers, and a John Deere Bobcat
* 8 E*Trade securities accounts
* Sports memorabilia
* Firearms
* Taxidermy
* Other personal property, including exercise equipment, arcade games, tools, hunting paraphernalia, safes, and a pitching machine
Merriman possessed an art collection, including works by Rembrandt, and a classic car collection, including a 1930 Lincoln. The seized and forfeited assets will be used to compensate the victims of this crime.
Merriman faces not more than 20 years in federal prison, and up to a $250,000 fine, as well as asset forfeiture and/or restitution.
This case was investigated by the U.S. Postal Inspection Service. The U.S. Marshals Service has provided substantial assistance in the seizing, cataloging, and storing Merriman's assets.
This case was prosecuted by a number of Assistant U.S. Attorneys, including Tim Neff, with James Russell, and Tonya Andrews handling the asset forfeiture.
The Securities and Exchange Commission (SEC) also has a case filed against Merriman.
