Elway reportedly swindled out of millions

October 14, 2010

Hall of Fame quarterback John Elway and a business partner were swindled out of millions by a Denver-area hedge fund manager who was arrested and charged this week with racketeering, securities fraud and theft that cost a large group of investors “tens of millions of dollars,” authorities said.

Elway, the former Denver Broncos star who built a business empire in Colorado with a string of auto dealerships that he sold in 1998 — they later became AutoNation — and partner Mitchell Pierce were among 65 people who invested about $71 million since 2000 with Mueller Capital Management, The Denver Post reported. Court documents said Elway and Pierce invested $15 million in the fund in March.

An affidavit filed by the Denver district attorney’s office indicates Sean Mueller had less than $9.5 million in cash and investments in April and liabilities to investors of $45 million — in what appears to be a Ponzi scheme.

Mueller, 42, is being held in a Denver-area detention center on $2 million bond.

Elway and Pierce filed a motion Tuesday stating that they met with Mueller in Denver on Feb. 22 to discuss an investment with his company Mueller Capital Management. In March, Elway and Pierce each wire-transferred funds to Mueller to be held in trust until they agreed on where to invest the money.

In the filing, Elway and Pierce "are not seeking funds invested by other investors, but rather are seeking to protect proceeds placed in trust, in a separate account," they said. The two said they "were not part of the same scheme that gave rise to the injunction entered by this court."

The Post reported that Elway and Pierce have asked the court in their filing to put their claim ahead of the others so that they may recapture their investment first. They said Mueller agreed to put their money in a trust and not mingle it with other investors' funds.