Ponzi Scheme Operator Receives 40 Year Sentence

By Robert Davis
Dec 7 2010

Sean Mueller, former hedge fund leader, was sentenced this morning to 40 years in an US federal prison for operating a Ponzi scheme that bilked investors out of $71 million.

Mueller was once a rising star in the financial world. He started a hedge fund that was returning some 20% on a yearly basis while other funds were returning negative results. He attracted the wealthy to his fund with promises of high returns and valuable investments.

He partnered with an investment and accounting firm and created a booming business for himself. His clients included the rich and famous, including former NFL quarterback John Elway. But little did anyone know that Mueller was building a façade that would eventually crumble around him.

Mueller said that everything was moving along fine until the market turned against him. At that time he got scared and started sending out false reports. He started using new investor money to payout returns on other investments to cover his tracks. The financial crisis in the US would be his final undoing.

In court today Mueller apologized for his mistakes and asked for forgiveness from the clients that lost a large part of their retirement and security funds. He was given a sentence of 40 years in prison, the maximum allowed under the terms of a plea agreement that Mueller made with prosecutors.

Bernie Madoff, who ran a larger version of the same scheme pleaded guilty to all charges and received 155 years in prison for his actions.