Mueller Gets 40 Years For Hedge Fund Ponzi Scheme

Dec 7 2010 | 1:07am ET

Hedge fund fraudster Sean Mueller was sentenced to 40 years in prison yesterday for running a $71 million Ponzi scheme.

Colorado state court Judge Martin Egelhoff imposed the maximum sentence on Mueller, whose scam victimized some 65 investors, including Hall of Fame quarterback John Elway. Many of the victims attended the Denver hearing, although Elway did not.

"I did some awful things," Mueller said. "I am sorry."

Mueller has pleaded with Egelhoff for a more lenient sentence, the 42-year-old citing his children and his remorse. But Egelhoff threw the book at him, saying his case was "less sheer greed, and more ego and hubris."

According to prosecutors, Mueller lied to investors about the size and success of his Mueller Capital Management and its Mueller Over-Under Fund. According to the state’s lawsuit against him, Mueller admitted he scammed investors in a series of e-mails and notes written prior to an April suicide attempt, when he was talked down from a building in suburban Denver. 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.

Only about $9.5 million remains in Mueller Capital's accounts, against some $140 million in liabilities.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of