A former NFL kicker has been arrested on charges of operating an illegal Ponzi scheme, one that allegedly defrauded investors of more than $20 million.
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Russell Erxleben, a former All-American at Texas and a punter for the New Orleans Saints and Detroit Lions, had previously served a federal prison term for securities fraud. In this latest indictment, he’s charged with operating a scheme from 2005 to 2009 that encouraged investment in post-World War I German government bonds and artwork allegedly created by French artist Paul Gauguin.
A federal court charged Erxleben with five counts of wire fraud, two counts of money laundering, and one count of securities fraud. The wire fraud and securities counts carry potential terms of 20 years apiece, and the money laundering carries a term of up to 10 years.
Erxleben allegedly used the proceeds from investors to pay himself and other, prior investors, which is the definition of a Ponzi scheme. In 1999, Erxleben had been sentenced to seven years in prison for a scam that totaled $36 million in ill-gotten gains. However, as the latest indictment notes, Erxleben did not disclose his conviction to new investors, nor did he note that he still owes $28 million to investors.