Mantria Update #21

John Elway and Mantria were mentioned in the Denver Business Journal as yet another Ponzi Scheme has been uncovered. (see below)

Mueller in court on Ponzi scheme charges
Denver Business Journal - by Renee McGaw
Date: Friday, October 15, 2010, 1:17pm MDT - Last Modified: Friday, October 15, 2010, 1:22pm MDT
Related:Banking & Financial Services, Legal Services Alleged Ponzi scheme operator Sean Michael Mueller appeared in Denver District Court on Friday to be charged with four counts of racketeering, theft and securities fraud.

Mueller, 42, was taken into custody on Wednesday. Bond was set at $2 million, but Mueller doesn't plan to post it. He'll remain in custody until trial, while cooperating with authorities trying to recover as much money as possible for investors, his attorney, Rick Kornfeld, told reporters outside the courtroom on Friday.

Mueller, in jail garb, appeared at the hearing but did not enter a plea. Typically, defendants answer charges at the arraignment hearing, which in Mueller's case is scheduled for Nov. 1.

Charges against Mueller were announced Tuesday by Denver District Attorney Mitch Morrissey.

Mueller formed Mueller Capital Management in 2000, which operated two hedge funds, the Mueller Over Under Fund LP and Mueller Partners Fund LP, according to prosecutors' filings with the court. By April 2010, about 65 people had invested a total of $71 million in the funds.

Those investors include former Denver Broncos quarterback John Elway and a business partner.

Ironically, Elway made headlines last year for his role as a hired speaker for Speed of Wealth, a Centennial-based promoter of "green" housing developer and manufacturer Mantria Corp. The Securities and Exchange Commission has accused both Speed of Wealth and Mantria of running a $30 million Ponzi scheme; a trial is expected in early 2011. Elway has not been implicated in any wrongdoing.

Beginning in 2002, Mueller used day-trading strategies to attempt to generate returns for investors, according to prosecutors' court filings. Despite massive losses in 2008 and 2009, he continued to tell investors that the funds were profitable, according to a supporting affidavit for Mueller's arrest warrant.

He provided fictitious brokerage statements to his accountants, while using investor funds to live an extravagant lifestyle including three luxurious homes, expensive cars and memberships in exclusive country clubs, according to the affidavit. New investor funds were used to pay "returns" to existing investors, a classic Ponzi scheme strategy, according to the affidavit.

In April, Greenwood Village police responded to a report that a man was threatening to commit suicide by jumping off an RTD parking garage. It was Mueller, who had shortly before sent an email to employees and investors apologizing for his actions and saying that he was going to kill himself.

"Sometimes life stresses overwhelm a person to the point where they can't go on," Mueller wrote in the email, according to court filings. "The confusion has finally won its battle with me and I feel like there are no good options left. I always thought I could make it back but that's not going to happen."

By April, less than $9.5 million in cash and investments remained in the funds, against a liability of about $45 million, according to the affidavit.

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