BULLETIN: In yet-another alleged case of massive Ponzi fraud, Sean Mueller has been charged with violating the Colorado Organized Crime Control Act (racketeering).
Mueller, 42, also has been charged with securities fraud and theft. The prosecution was brought by the office of Denver District Attorney Mitch Morrissey, who credited the U.S. Secret Service and the Colorado Division of Securities for assisting in the Ponzi probe.
“This is an important example of how agencies can work together to protect investors in Colorado,†said Fred Joseph, commissioner of the Colorado Division of Securities.
Mueller, who is believed to be cooperating with authorities, is expected to surrender by Friday. Bond has been set at $2 million cash.
Among the victims of the $71 million Ponzi scheme was John Elway, the former quarterback of the Denver Broncos and a member of the Pro Football Hall of Fame, prosecutors said.
Prosecutors at both the state and federal levels have used racketeering statutes to bring down Ponzi schemers in recent months, according to court filings.
Mueller was operating a bogus hedge fund, prosecutors said. At least 65 victims entrusted Mueller with their money, which he spent to live a luxurious lifestyle and to buy tony homes, expensive cars and country-club memberships.
It was a “classic” Ponzi scheme in which Mueller was upside down on his obligations to investors by a factor of nearly five-to-one, owing about $45 million but having less than $9.5 million to cover redemption requests, prosecutors said.
The scheme was exposed in April, when Mueller threatened to jump off a parking garage in Greenwood Village, Colo., according to court filings.