A former first round draft choice for the New Orleans Saints learned he will spend the next 90 months in federal prison for masterminding a $2 million Ponzi scheme. Russell Erxleben, 57 - the current NCAA record-holder for the longest field goal in history - received the sentence after pleading guilty to a single count of wire fraud and money laundering in December 2013. The prison term will not be Erxleben's first foray in federal prison - he previously served a 10-year sentence for a $30 million foreign currency trading scheme in 1999.
Erxleben was a college All-American while attending the University of Texas in the late 1970s, and later had the distinction of being only one of three kickers drafted in the first round of the NFL draft. However, after playing six seasons in the NFL, Erxleben turned to investing. He was later arrested and charged with securities fraud after authorities accused him of masterminding a foreign currency trading scheme in which investors lost tens of millions of dollars. In 1999, he received a ten-year prison sentence and was ordered to pay $28 million in restitution to defrauded investors.
However, after being released from federal prison in 2005, Erxleben again became involved in the investment business, forming several companies under a main entity Erxleben Entities that promoted various investment opportunities including the ability to profit from post-World War I German government gold bearer bonds. Investors were solicited to purchase the bonds for $1,000 apiece, after which Erxleben would place the bonds in trust and create securities that would then purportedly be in high demand by outside investors. While the scheme lasted several years, investors ultimately never received the bonds or any associated returns.
After the German bond venture fizzled out, Erxleben began soliciting investors in 2009 for another venture, Gauguin Partners LLC ("Gauguin"). According to Erxleben, he had in his possession a rare painting commissioned by Paul Gauguin, a 1800's French artist. Investors were told that if the painting could be certified as authentic - a process that cost $75,000 - the painting could then be sold for nearly $60 million. Again, investors saw no returns, and instead their funds were diverted by Erxleben for the payment of personal expenses.
Erxleben was arrested in January 2013 and charged with five counts of wire fraud, two counts of money laundering and one count of securities fraud. Prosecutors then successfully argued for Erxleben to remain in custody pending trial on the basis that he was a flight risk. A federal magistrate judge later issued an order concluding the absence of any conditions for Erxleben's pre-trial release, citing Erxleben's propensity for posing a financial danger to others, as well as testimony by a former inmate that Erxleben had attempted to hire him to intimidate a key witness.
A copy of the indictment is below: