Denver-area man accused in Ponzi scheme involving tens of millions of dollars

Denver-area man accused in Ponzi scheme

DENVER — A hedge fund manager who claimed his investments never lost money, even during the economic downturn, faces allegations that he ran a Ponzi scheme and admitted to falsifying documents in an apparent suicide note.

Sean Michael Mueller, 41, who controlled Greenwood Village-based Mueller Capital Management LLC, threatened to jump off a building in Greenwood Village on April 22, Colorado Securities Commissioner Fred Joseph said Wednesday.

Greenwood Village police intervened and took Mueller to a hospital, according to court documents filed in a civil lawsuit seeking to seize the company and its assets. A Denver District Court judge granted Joseph’s request late Tuesday to place the company under regulators’ control.

Joseph said Mueller tried to raise as much as $100 million and accepted $20.6 million from three investors and an unknown amount from others. Just last month, two investors placed $15 million into a fund Mueller controlled.

No attorney was listed for Mueller in court documents and calls to his company were unanswered. There was no number listed for Mueller’s residence.

A court hearing is scheduled May 6.

Greenwood Village police referred calls to the FBI, which is assisting in the investigation. FBI spokesman Dave Joly said he did not have details about Mueller’s threatened suicide.

“The confusion has finally won its battle with me and I feel like there are no good options left,” Mueller said in an e-mail sent to investors April 22 shortly before his threatened suicide. “I always thought I could make it back but that’s not going to happen.

“I’m sorry from the bottom of my heart and I wish I could have been made it different,’ read an e-mail filed in court.

The company’s Over-Under Fund claimed $122 million in assets in December. In a handwritten note following his threatened suicide, Mueller referred to bank accounts totaling $15 million and said, “This is what is left.”

He took sole responsibility and described his associates as “silent partners.”

“To my knowlege, they didn’t know about the falsified documents,” Mueller wrote.

His admission in the notes and e-mails prompted regulators to act quickly to seize the company and protect investors, Joseph said. Investigators also were searching for about $1 million transferred out of Mueller Capital Management accounts in the past three weeks.

Colorado securities regulators opened their investigation after receiving an anonymous letter March 25 that compared Mueller’s funds to the Ponzi scheme run by Bernard Madoff. The letter said Mueller only allowed select investors to place money with him, claimed he never lost money in eight years and the company showed returns of 12 percent to 25 percent per year.

“That is very reminiscent of what Mr. Madoff did,” Joseph said. “And promises of consistent 12 percent returns in all markets? That’s like trying to roll the dice and come up with seven, 52 times in a row. It’s hard to do.”

Joseph said low yields in the bond market and volatility in the stock market makes claims by Mueller sound very attractive, adding there are potentially several other undiscovered schemes out there.

“It’s the Tooth Fairy syndrome,” Joseph said, adding that investors need to be wary of glowing claims. “But, people want to believe.”

On Tuesday, a Weld County judge sentenced 31-year-old Jason T. Brooks to 32 years in prison and ordered him to pay more than $5 million in restitution in another Ponzi scheme. Colorado Attorney General Johns Suthers said Brooks collected $10 million from investors but used the money to pay other investors and personal expenses, and to gamble.