Hedge fund manager Sean Michael Mueller has been formally charged with racketeering, securities fraud, and theft for his decade-long role in using investor funds to pay existing investors. Mueller failed to place money in brokerage funds as he promised, manufacturing phony statements for investors instead in order to cover up his wrongdoing, say prosecutors about the results of an investigation by the Colorado Division of Securities that was aided by the U.S. Secret Service (via Denver Daily News).
Mueller led Greenwood Village-based Mueller Capital Management, where in April he told investors that just a fraction of the money remained in a fund that was supposed to have held $122 million in assets (via The Associated Press).
Dow Jones Newswires columnist Al Lewis points out that several investors had at least $20 million in Mueller's funds, along with 30 others who had made "substantial investments." Mueller recruited some notable names, such as former Denver Broncos superstar John Elway, Blaine Rollins, a former manager of the Janus Fund and director on the Lance Armstrong Foundation, and Jim Burke, managing partner of Denver-based High Sierra Energy.