Ex-football player Erxleben arrested again on fraud charges

Eight years after his release from prison on fraud charges, former football player Russell Erxleben was arrested Thursday at his Dripping Springs home. He is accused of defrauding investors through a Ponzi scheme that paid out more than $2 million in nearly four years.

In an indictment handed up Tuesday and unsealed Thursday, Erxleben was charged with five counts of wire fraud, two counts of money laundering and one count of securities fraud. He appeared, in black gym shorts and a T-shirt, before a federal judge hours after his arrest and asked for a court-appointed lawyer.

U.S. Magistrate Judge Mark Lane said the government had determined Erxleben was a risk of flight or a danger to others and should remain in custody until his arraignment and detention hearing next week.

Erxleben was a three-time All-American kicker at the University of Texas in the late 1970s. He was a first-round pick of the New Orleans Saints and played six seasons in the NFL, mostly as a punter. But since the latter part of the 1990s, he has become more famous for his financial and legal troubles.

The latest indictment said that from about September 2005 to October 2009, Erxleben used three companies, all under Erxleben Entities, to promote several fraudulent investment opportunities, mainly in defaulted post-World War I German government gold bearer bonds. The bonds, instruments of indebtedness issued by Germany in the 1920s and 1930s, have potential historical value, but their financial worth is disputed.

Nevertheless, Erxleben told investors those bonds — sold for about $1,000 each — would be placed in a trust that would create securities coveted by institutional investors who would buy them at premium prices, generating high dividends, court records said.

But none of the investors received the bonds or any ownership document, nor did they receive any return on their investment, the filings said.

Federal authorities said that in another scheme, which began about March 2009, Erxleben feigned to be a member of Gauguin Partners LLC and received money from investors for the examination and appraisal of a painting purportedly by Paul Gauguin, the late 19th century French artist.

He told investors that if the artwork was proved authentic — a process that would cost about $75,000 — the painting could be sold for an estimated $58 million, records said.

The indictment said Erxleben used proceeds from the investment ventures for the benefit of himself and family and to maintain the Ponzi scheme, in which returns paid to earlier investors were actually funds provided by later investors. He made various wire transfers using numerous financial accounts opened and maintained by others, including at least one family member, the records said.

Read More: http://www.statesman.com/news/news/crime-law/former-ut-football-player-erxleben-arrested/nT55j/