Tell It To Al

Denver money manager Sean Mueller, 41, threatened suicide last week after sending his investors notes indicating that his statements were falsified and that the money was largely gone.

Mueller managed about $120 million for wealthy and famous people in Colorado and Arizona, through a firm he founded in 2002 called Mueller Capital Management LLC in Greenwood Village, Colo. Local police intervened in his suicide attempt and he was taken to a local hospital.

Many of his victims came from the Cherry Hills Country Club in suburban Denver, where he played golf and gained the trust of influential people who touted him as an investment whiz.

He did not have an impressive background as a money manager, but he is alleged to have plied his victims with fake performance records and approached them through people they trusted.

Blaine Rollins, who managed one of America’s best known mutual funds, The Janus Fund, was Mueller’s director of research. Rollins, a cancer survivor who is a director for the Lance Armstrong Foundation, has hired an attorney who told me this morning that Rollins invested a substantial amount of money in Mueller’s fund and doesn’t know what happened to it. Rollins provided research for the firm but was not involved in trading and didn’t see the books, the attorney said.

Colorado State Securities Commissioner Fred Joseph has won a court order freezing Mueller’s assets on Tuesday, alleging that Mueller was running a Ponzi scheme.

In his notes, Mueller indicated that nobody knew about the fraud but him, reminiscent of Bernie Madoff. He even said that two partners of a local accounting firm, Bill Saetveit and Bill Schaefer of a Bailey Saetveit & Co. PC did not know about it either.

Saetveit and Schafer did not return calls or emails. Neither did Mark Weakley, an attorney in Boulder, for powerhouse law firm Holm Roberts and Owen LLP. He is listed as legal counsel on a 2002 offering memorandum for one of Mueller’s funds. The memorandum also lists Charles K. Dahlke as Mueller’s accountant, who also did not return calls.

So far, victims of the scheme are keeping quiet, too, but Joseph reports that three of them had at least $20 million apiece in Mueller’s funds.

It is often difficult to get wealthy people who’ve been ripped off to come forward. Many of Bernie Madoff’s victims never came forward, prefering to forgo any attempt at recovery to spare themselves embarassment. Many of the investors at Enron never said a peep.

This is much like rape. Women often choose not to report rape out of embarrassment, even though the one who should be embarrased is the perpetrator. Victims should never be made to feel this way, and keeping quiet doesn’t serve justice.

In Mueller’s case, there appears to be some money left, so it is likely some of his victims will step forward in the days to come, aiding regulators and law enforcement officials and filing lawsuits.

Below are links to columns I’ve written as the story has evolved, and court documents detailing the alleged fraud.

Click here to read my piece in The Wall Street Journal.

Click here to read my column about Mueller’s suicide attempt. 

Click here to read my column about Mueller’s past.

Click here to read my column about Rollins.

Click here to read Colorado Security Commissioner Fred Joseph’s motion to appoint a receiver for Mueller’s assets.

Click here to read Exhibits 1-4, including some of Mueller’s notes.

Click here to read Exhibits 5-7, including more of Mueller’s notes.

The wonks on TV, the economists, the guys on Wall Street, and the people who live inside the Beltway keep saying America is turning the corner.

Americans, however, remain unconvinced, according to the latest poll by Harris Interactive. Click here for the survey, or read on for the some of the results:

* 70% say the current job market in their region is bad; only 10% say it is good.

* 38% say the job market will not start growing for another year or longer; 21% say it will start growing between 6 and 12 months from now; and only 12% believe it will begin growing in the next six months.

* 67% give President Obama negative ratings on his overall handling of the economy, more or less unchanged from last month.

* 32% of Americans expect the economy to improve, 33% say it will stay the same, and 25% expect it to get worse.

* 43% feel less secure about their financial situation compared to last year; 23% feel more secure; 32% feel the same as last year.

* 29% believe their household’s financial condition will worsen in the next six months; 50% believe it will remain the same; and 22% believe it will improve.

Seems like everyone believes the economy is improving except the American people. Harris notes that the old “It’s the economy, Stupid” complaint may hurt incumbents in November.

How’s the economy going for you?

Anthony Accetta, a former U.S. prosecutor, is beside himself.

If the financial world collapsed because of mortgage fraud, where are the prosecutions? he asks.

Why all this talk of financial reform, and a few civil regulatory actions here and there, but no serious discussions about putting bad people in prison?

When I first met Accetta in 2005, he told he he’d been working for major Wall Street firms and discovered mortgage fraud had become an industrywide practice. He predicted America’s biggest investment houses and banks would all collapse under the weight of their lies. Never did he dream that the U.S. government would bail them all out and gloss over their misdeeds.

Click here to read my column on Accetta.

When Ed Mueller became CEO of Qwest Communications International Inc. on Aug. 10, 2007, Qwest shares closed at $8.37.

Today he’s announced he’s selling the company for the stock equivalent of $6.02 a share to CenturyLink. Click here for the official press release.

This is a guy who made more than $12 million in 2009 and more than $11 million in 2008.

Was he worth it?

Not if CEOs are to be judged by strictly their stock price. But bear in mind that the stock market isn’t what it used to be, and that when Mueller took over the company, it was clearly headed no where.

Former CEO Dick Notebaert had come to Qwest with the mantra: “The Spirit of Service.” He stabilized the company after the management team before him nearly bankrupted it amid an accounting fraud scandal on par with Enron.

This disgraced management team included Denver billionaire whiz Phil Anschutz, who was Qwest’s co-chairman; now-imprisoned felon Joe Nacchio, who was Qwest’s CEO; and Thomas Donohue, who was on Qwest’s board and is now running the U.S. Chamber of Commerce, where he fights against the kind of financial reforms that might curb debacles like Qwest.

At its peak, Qwest was valued at $60 billion. This team brought it down to pretty close to zero.

And before this self-dealing crew came along, Qwest was led by one shoddy management team after the next.

With an anything-for-a-buck mentality, they sold off cable and got out of the wireless business. So today, Qwest is little more than an ever-shrinking landline business with some highly commoditized long-distance fiber and an unwieldy pile of debt.

Frankly, I’m surprised Mueller was able to find a buyer at any price. My hat’s off to him for doing something that values Qwest at about $22 billion, even if half of that is debt.

As for Qwest employees and Qwest’s hometown of Denver, you know the drill. Another corporate headquarters bolts the state. More job cuts and a lot more vacant real estate downtown.

This will mark another sizeable setback for the state’s economy. How’s that for “The Spirit of Service”?

I never dreamed Enron would be fodder for Broadway. But here it is, Enron, the play, with light sabers, the three blind mice and dancing dinosaurs.

Click here to read the column I wrote after seeing the show. I also talked about it on Fox Business News with David Asman.

I found Max Montrose walking around Civic Center Park in Denver on Tuesday with a bushy dope plant growing out of his backpack.

“I’ve got a license for it in my pocket,” he said. “I’ve got a permit to be here.”

He was among throngs and throngs of stoners pushing for legalization at 4/20 demonstrations in several cities, including Tucson, Ariz. and Santa Cruz, Calif. Already medical marijuana is legal in 14 states, and if Colorado is any guide, it’s a front for complete legalization.

Recent loosening of marijuana laws have marked a good run for the dopesters. But the pace appears to be slowing down with two recent polls revealing that a majority of Americans oppose legalization.

Montrose is host of Medicinal Marijuana TV  , a sociology major, and a bit of a sociology project himself.

“I educate people about rules, regulations, history of marijuana, anything you want to know,” he said. “I know anything from prohibition to horticulture … ”

He said he grows weed legally for just a handful of exclusive customers.

“A couple dispensaries are kind of fighting to grab me as a grower,” he said. “But I’m really not trying to do anything huge.”

Marijuana innovations never cease. Why wait for the munchies when you can have Hemp I Scream right from the start? Or is that just the part of the weed they use to make rope?

I walked from booth to booth, squeezing through hundreds of people brazenly smoking pot, as clusters of Denver police watched with apparent amusement.

I started learning all kinds of things. Did you know you can even listen to dope on the radio?

When I go looking for Bud, it’s usually Budweiser, not this.

I’m pretty sure Lance Armstrong didn’t come up with this bracelet.

Daddy Fat Stacks? Is that where you go for relief from your chemotherapy?

A retail recession? Not here, dude.

I suddenly needed two quarters.

Yeah, that ought to fix it.

I wish I had more to report.

This one dude – who I may write more about later – recognized me in the crowd and started pontificating about his business plan. He said he was a commercial real estate broker. But with the market in shambles, said he he’s now trying to raise a pool of venture capital so he can roll up the highly fragmented medical marijuana business.

This sounded like a great business story for me to cover, but suddenly, I was like, dude, slow down, I can’t get this all down, wait. How are you gonna … what are … why … ? And then I realized I’d been wandering around for 45 minutes through wafting clouds of dope smoke.

Suddenly, I was no longer sure that old bit about getting a contact high was a myth. And I feared my suit was begining to reak. I suddenly had to leave. Everybody was just starting to freak me out. The smoke kept getting thicker. And the only way out was to walk through it again.

I know what you are thinking, but the fact is, I didn’t even like dope when I was a teenager. This was just research. I was just doing my job. All in a day’s work. Really.

New Securities and Exchange Commission charges has Goldman Sachs spouting denials in the most absolute of terms.

“Goldman Sachs would never condone one of its employees misleading anyone, certainly not investors, counterparties or clients,” the bank said in the letter to clients, according to a story by The Associated Press. Click here to read the AP story. And click here to see the SEC’s press release.

Never? Can Goldman Sachs really expect anyone to believe its use of the word, never?

What about last March, when it was one of 14 specialist firms that paid $70 million to settle SEC charges for unlawful trading?

“These firms violated the public trust by abusing the privileged position they had as specialists on the various exchanges,” said James Clarkson, Acting Director of the SEC’s New York Regional Office. Click here to see the SEC release.

What about March 2007 when Goldman Sachs paid $2 million to settle SEC allegations that it allowed some of its customers to illegally profit by selling securities short just before public stock offerings? Click here to see the SEC release.

What about May 2006, when Goldman was one of 15 Wall Street firms to pay more than $13 million in fines to settle SEC allegations over violations in trading auction rate securities? Click here to see the SEC release.

What about January 2005, when Goldman agreed to pay $40 million to settle SEC allegations that it doled out hot IPO stocks as an inducement to get customer to buy additional shares in the aftermarket to help pump up the price? Click here to read the SEC release.

What about March 2004, when Goldman subsidiary Spear, Leeds & Kellogg Specialists LLC was one of five firms to pay $240 million for running trades ahead of its customers?

“When an exchange specialist unlawfully takes advantage of its privileged position by seizing trading opportunities that it should leave for public customers, it fundamentally undermines the fair and orderly operation of the exchange auction system,” said Stephen M. Cutler, the SEC’s Director of Enforcement. Click here to read the SEC release.

And what about September 2003 when Goldman paid $9.3 million because it’s chief economist was getting insider trading tips from the Treasury Department? Click here to read the SEC release.

I know, I know. Goldman Sachs cooperated in a lot of these deals, like a stung street informant. And it typically settles allegations without admitting nor denying guilt.

Still, I think “never” is a pretty big word for Goldman Sachs to be wielding. Unless it’s prepared to say we should “never” believe a word it says.

Peeling the onion further, the Securities and Exchange Commission files charges against Goldman Sachs. The SEC is signalling that if it will go after Goldman, it will go after any firm. I talk about it with 9News Anchor Eric Kahnert:

It’s not just a jobless recovery, it’s a raise-less one.

There are no salary changes planned for the next six months, according to 53% of U.S. chief financial officers and senior comptrollers surveyed by Grant Thornton LLP.

Only 15% said they planned to increase salaries.

What about the rest?

Well, that’s the bad news: 32% planned to decrease salaries.

As for bonuses: 47% plan no change, 44% reductions, and only 8 percent plan to increase.

It could get worse: 12% said they are more worried this year about their company’s ability to stay in business.

Think the economy is improving? Not if you’re selling fried chicken.

Click here to read my column. I also talk about it on The Wall Street Journal’s online show, The News Hub: