Suicidal Colo. Hedge Fund Manager Faces Criminal Probe

May 10 2010 | 3:47pm ET

The Colorado hedge fund manager talked out of jumping off of a parking garage last month is now the subject of a criminal investigation.

Sean Mueller and his Mueller Capital Management have already been sued by the Colorado Securities Commission, accused of running a $20 million Ponzi scheme. Now, the Denver district attorney has opened a probe of its own, and has begun speaking with representatives of Mueller’s investors.

According to the state’s lawsuit against him, Mueller admitted he scammed investors in a series of e-mails and notes written prior to his suicide attempt. In a note written after the suicide attempt, Mueller admitted that documents claiming his Over-Under Fund managed $122 million were falsified. He wrote that only $15 million remained of the $20.6 million he collected.

Mueller also allegedly promised double-digit returns regardless of market conditions, telling potential investors he had never lost money in eight years and consistently returned between 12% and 25% annually.

Mueller Capital’s assets have been temporarily frozen, although a Colorado judge last week postponed until May 27 a hearing on whether to make the freeze permanent.

“Sean intends to actively and fully cooperate with the Division of Securities, law enforcement and the receiver,” Mueller’s lawyer, Rick Kornfeld, said. “He’s expressed that intention to all of these parties.”

On April 22, Mueller sent an e-mail to clients allegedly apologizing for the fraud and threatening to kill himself. He was later talked down from the second-story ledge of a Greenwood Village, Colo., parking structure.

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