Former Broncos quarterback John Elway and his business partner invested 15 million with hedge fund manager Sean Mueller. It later turned out that Mueller’s company “only had $9.5 million in assets in April and $45 million in liabilities,” despite the fact that 65 people invested $71 million with it over a 10-year period, writes the Denver Post. Here’s more from the Wall St Journal:
According to the filing, Messrs. Elway and Pierce had invested with Mr. Mueller for many years, but met with him in February to discuss setting up a separate fund that would make more conservative investments than the day-trading investments Mr. Mueller primarily pitched.
Messrs. Elway and Pierce then wired millions of dollars to Mr. Mueller in March 2010, “after receiving assurances from Mueller that the New Funds would not be mingled with any other funds … to be held in trust, in their respective names, in an account at Morgan Stanley,” their filing said.
“The New Funds were to be held in a constructive trust … for Intervenors until they determined an agreed upon course of conduct,” the filing said. One month later, Mr. Mueller was accused of running a Ponzi scheme. Messrs. Elway and Pierce said they approached the receiver of Mr. Mueller’s assets with their demands and haven’t received their money. Their motion doesn’t include any written documents on their deal with Mr. Mueller.
I don’t think any of the people who had trusts with Bernie Madoff ever got their money back in a prioritized way. I wonder what motivates people to try.