April 8, 2009
DEPARTMENT OF JUSTICE SEIZING ASSETS AS PART OF MULTI-MILLION DOLLAR PONZI SCHEME INVESTIGATION
DENVER – U.S. Marshals are actively seizing art, homes, vehicles, sports memorabilia and bank accounts as part of an investigation into a ponzi scheme allegedly orchestrated by Shawn R. Merriman. The scheme is thought to have defrauded at least 38 investors or groups of investors of between $17,000,000 to $20,000,000, Acting United States Attorney David Gaouette announced. The seizures were authorized by court order after the U.S. Attorney’s Office filed a civil asset forfeiture complaint under seal late last week. The case is being investigated by the U.S. Postal Inspection Service. Merriman is cooperating with investigators.
According to the complaint, Shawn Merriman, through his companies, Market Street Advisors and Mountain Springs Partners, operated an illegal investment/securities/ponzi scheme out of his residence in Aurora, Colorado. Merriman promised individuals that he would invest their money in stocks and that those investments would earn rates of return ranging from 7 percent to 20 percent annually.
Merriman began work in 1989 as a licensed stockbroker. In 1994, he started his own investment business. He told investigators that he had a very aggressive investment strategy, losing approximately $400,000 shortly after beginning. Instead of reporting this loss to investors, Merriman started a second company, telling investors that he would have a more conservative approach. Most of Merriman’s investors came to him by word of mouth. He would give potential investors a one page description of his business and represented to them that all of their money would be pooled and used toward stock trading.
Merriman admitted that, in reality, he never made any investments but instead used the investors’ money to support his lavish lifestyle and pay investors who wanted to withdraw their money. He would fabricate monthly statements showing false rates of return, false investments, and false monetary gains. All of Merriman’s income since 1994 was generated by his fraudulent scheme. Merriman admitted that he implemented the ponzi scheme from 1994 to 2009. The government is trying to determine the value of the assets that presently remain in his possession, which includes mostly an art collection, including works by Rembrandt, and a classic car collection, including a 1930 Lincoln.
Items being seized by U.S. Marshals include:
* 157 pieces of Old Masters Fine Art, located at Merriman’s residence in Aurora
* 170 pieces of contemporary art, also located at Merriman’s residence
* 43 pieces of framed fine art, 4 bronze busts, and one acrylic sculpture, located at Merriman’s residence
* Merriman’s residence, located in Aurora, Colorado
* Other real property, located in Island Park, Idaho
* Numerous conveyances, including vehicles, collectible cars, motorcycles, a boat, a motor home, trailers, and a John Deer Bobcat
* 8 E*Trade securities accounts
* Sports memorabilia
* Firearms
* Taxidermy
* Other personal property, including exercise equipment, arcade games, tools, hunting paraphernalia, safes, and a pitching machine
The complaint filed in this case is civil. To prevail the government needs to prove their complaint by a preponderance of the evidence.
This case is being handled by Assistant U.S. Attorneys Tonya Andrews and James Russell of the Asset Forfeiture Unit, as well as Assistant U.S. Attorney Tim Neff of the Economic Crimes Section.
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Click here for the SEC's press release and complaint regarding the Shawn Merriman matter
Click here for the civil asset forfeiture complaint filed by the U.S. Attorney's Office
