Russell Allen Erxleben Sentenced To 90 Months In Federal Prison For $2 Million Ponzi Scheme
In Austin this morning, 57–year-old Russell Allen Erxleben of Dripping Springs, TX, was sentenced to 90 months in federal prison followed by three years of supervised release and ordered to pay restitution for implementing a Ponzi scheme involving an estimated $2 million announced the U.S. Attorney’s Office for the Western District of Texas.
In December, Erxleben pleaded guilty to federal wire fraud and money laundering charges. 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 admitted that he used investment proceeds for the benefit of himself and his family, to pay purported 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 in an effort to avoid detection by authorities.
This investigation was conducted 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 prosecuted this case on behalf of the Government.