Broncos legend John Elway once lost $15,000,000 to Ponzi scheme fraud
John Elway remains the greatest quarterback the Denver Broncos have ever seen. Of the three Super Bowls the franchise has won, two of them were helmed by him. He has five appearances in the championship game as a player with the team, and he was also the general manager when they won Super Bowl 50. In every single way, he is a legend in Denver.
Despite his strengths as a player, and later as an executive, he has been unfortunate in making some wrong decisions with his own money. One such instance took place in 2010, when he and a business associate were defrauded of $15 million in a Ponzi scheme.
One Sean Mueller convinced the quarterback that he was running a "hedge fund" and got the former Broncos great to invest in that. In reality, the schemer was using those funds to pay off previous investors. He concocted fraudulent documents to throw people off the trail.
However, reality caught up with him and authorities got on his trail after he threatened to end his life and asked his "clients" to take care of his family. It emerged that apart from the millions he took from John Elway, he also took another $71 million from "other investors."
John Elway was, by far, the biggest investor in the project. Mueller had promised a risk-free 12-25 percent annual return to those he duped, which helped lure people in. He also maintained an aura of exclusivity that worked as a sales pitch to affluent individuals and groups.
John Elway was so furious that he demanded he be compensated before others. However, that is not normal course of action and in 2014, recovery efforts managed to secure $10 million for distribution to all victims.
Given the size of his investment, which was net of $9 million after withdrawals, he was expected to recover $1.44 million, as per the website Ponzitracker. It is clear, then, that Denver Broncos legend lost significant money in this fraudulent scheme.
John Elway's other great investment mistake
Being defrauded in a Ponzi scheme is not great. It is real money that John Elway lost. But if the Hall-of-Fame quarterback has reasons to feel sorry, he will always look back at the opportunity he missed out on to be a minority owner of the Denver Broncos.
After he brought in their first Super Bowl in 1998, then-owner Pat Bowlen offered him 10 percent of the team in lieu of the money owed to him, which was $21 million. It included a further sweetener of another 10 percent at a discounted price of $15 million. He also included a buyback option from the quarterback, where he would pay $5 million on top of the purchase price and 8 percent annual interest.
He had until June 1999 to make up his mind. John Elway, being the consummate professional, instead focused on football and got them another ring and passed up on the offer as he did not see himself as an executive. If he had kept the 20 percent stake in the franchise, he would have been way better off than he is today.
John Elway was offered an opportunity to purchase 20% of Denver Broncos for 15 Mil back in 1998. He said no and invested onto a 150M Ponzi scheme and he lost money. Today the broncos sold 100% to Walmart heir Rob Walton for 4.5B. Payday for Elway would had been 900 M. Ouch !
When current owners led by Rob Walton purchased the franchise for $4.6 billion, it could have netted John Elway $930 million on a cost price of just $36 million. Overnight, he could have become a billionaire.
Instead, the quarterback not only lost money on the Ponzi scheme, he also invested in a laundromat franchise, a Hispanic media company and a sports retail website, all of which failed. And despite turning down the 20 percent share in the team because he did not see himself as an executive at the time, he did become an excellent general manager for the franchise.
His financial returns have been meager compared to what could have been. But his greatness on the field is something that no one can take away. Maybe that is why they glory is greater than gold!