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Press Release

Federal Grand Jury Indicts Russell Allen Erxleben In Connection With An Alleged $2.5 Million Ponzi Scheme

For Immediate Release
U.S. Attorney's Office, Western District of Texas

In Austin, federal authorities announced the indictment and arrest this morning of 56–year-old Russell Allen Erxleben for allegedly running a Ponzi scheme that generated more than $2 million.

An eight–count federal grand jury indictment, returned on Tuesday and unsealed today, charges the Dripping Springs, Texas, resident with five counts of wire fraud, one count of securities fraud, and two counts of money laundering.  According to the indictment, 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.  The indictment alleges that Erxleben used several companies, including WALTEC Consultants, LRE Holdings, and The MDM Group, to promote investments in fraudulent ventures, namely, 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.  The indictment further alleges that Erxleben used investment proceeds for the benefit of himself and his family, and to pay dividends to previous investors.  In furtherance of the fraudulent scheme, the indictment also alleges that 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.  According to the indictment, Erxleben also failed to disclose to investors his 1999 federal felony criminal convictions for securities fraud and conspiracy to commit securities fraud, as well as the fact that he owed approximately $28 million in restitution stemming from those convictions.

Upon conviction, Erxleben faces up to 20 years in federal prison for each of the wire fraud and securities fraud counts, and up to 10 years in federal prison per money laundering count.  Erxleben remains in federal custody pending the outcome of a detention hearing next week.

This indictment resulted from an investigation by the Internal Revenue Service-Criminal Investigation together with 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. 

An indictment is merely a charge and should not be considered as evidence of guilt.  The defendant is presumed innocent until proven guilty in a court of law.

Updated December 15, 2014