Russell allen erxleben pleads guilty to role in ponzi scheme that generated an estimated $2 million
In Austin this afternoon, 56–year-old Russell Allen Erxleben of Dripping Springs, TX, pleaded guilty to federal wire fraud and money laundering charges in connection with a Ponzi scheme that authorities believe generated more than $2 million. As a result, Erxleben faces an agreed sentence of 90 months in federal prison plus full restitution to be determined by the Court.
According to court records, from 2005 until October 2009, Erxleben devised and implemented a scheme to defraud and to obtain money from investors by the use of fraudulent pretenses, representations and promises. Erxleben used several companies, including WALTEC Consultants, LRE Holdings, and The MDM Group, to promote investments in fraudulent ventures including investments in post-WWI German government gold bearer bonds and in a work of art purportedly by Paul Gauguin, a famous late 19th-early 20th century artist. By pleading guilty, Erxleben admittedly used investment proceeds for the benefit of himself and his family, to pay dividends to previous investors, and to fund other undisclosed endeavors, contrary to promises and representations made by the defendant. In furtherance of the fraudulent scheme, Erxleben made various wire transfers using numerous financial accounts which were opened and maintained by others, including one or more family members, in an effort to avoid detection by authorities.
Internal Revenue Service-Criminal Investigation Special Agent In Charge Steven McCollough noted that all investors need to be wary when investing their hard earned money. “Investors should not allow themselves to be blinded by the quasi-celebrity status of individuals like Russell Allen Erxleben, a former University of Texas and NFL football player, when making investment decisions,” McCollough said.
Erxleben remains in federal custody pending formal sentencing scheduled for February 24, 2014, before U.S. District Judge Lee Yeakel.
This indictment resulted from an investigation by the Internal Revenue Service-Criminal Investigation and the Texas State Securities Board along with assistance from Homeland Security Investigations (HSI). Assistant United States Attorneys Matthew Devlin and Alan Buie are prosecuting this case on behalf of the Government.