Former NFL Kicker Russell Erxleben Charged in Ponzi Scheme Yet Again
A former kicker for the New Orleans Saints was arrested Thursday and charged with running a $2 million Ponzi scheme - after serving a seven-year sentence for a previous securities fraud, the U.S. attorney said.
Russell Allen Erxleben, 56, of Dripping Springs, Texas, is charged with five counts of wire fraud, one count of securities fraud, and two counts of money laundering, the U.S. Attorney's Office said in a statement. The federal grand jury indictment was returned in Austin on Tuesday and unsealed on Thursday.
Prosecutors claim that from 2005 to 2009 Erxleben used several companies to market investments in phony post-World War I German government gold bearer bonds and in artwork purportedly by Paul Gauguin.
"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," the U.S. Attorney's Office said in a statement.
Prosecutors claim that Erxleben used WALTEC Consultants, LRE Holdings and The MDM Group to promote his "fraudulent ventures."
"Erxleben used investment proceeds for the benefit of himself and his family, and to pay dividends to previous investors," prosecutors said in the statement. "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."
A place kicker and punter, Erxleben was a three-time All-American at the University of Texas in Austin, from 1976 to 1978. He set the record for the longest field goal in NCAA history in 1977, a 67-yarder against Rice University. The Saints picked him in the first round of the 1979 NFL Draft - a rarity for kickers. His son, Ryan Erxleben, is a punter at Texas Tech University.
An investor sued Erxleben in Travis County Court in October 2012, claiming he was swindled out of $60,000 in the Ponzi scheme.
Federal prosecutors claim that more than 500 were taken for millions of dollars in the Ponzi.
If convicted, Erxleben faces up to 20 years in prison for each of the wire fraud and securities fraud counts, and up to 10 years for each money laundering count. He is in federal custody pending a detention hearing next week.