On December 2, 2009, Shawn Richard Merriman, age 46, of Aurora, Colorado, pleaded guilty to one count of mail fraud and one count of asset forfeiture. The guilty plea was tendered before U.S. District Court Judge Marcia S. Krieger. Merriman is scheduled to be sentenced on May 10, 2010.
Merriman was charged with running a fraudulent investment scheme from June 1994 through February 2009. According to the stipulated facts, Merriman defrauded investors out of approximately $20 million by obtaining their money by means of materially false and fraudulent representations and promises. Merriman, operating under the names of Mountain Springs Partners, L.P., and the limited liability companies LLC-1, LLC-2, Marque LLC-3, LLC-4, and LLC-5, represented to investors that he would use their money to buy and sell securities and would return profits from such trading to them.
Merriman accepted millions of dollars from more than one hundred individuals and entities but failed to use a lot of that money to buy and sell securities. Rather, he used much of the money for his own use and benefit. Merriman made misrepresentations to the investors, including that he had used their money to buy and sell securities and that his trading had resulted in profits. He also included those misrepresentations in fraudulent account statements that he mailed. He further responded to investors' requests for the return of their money or payment of their investment gains by transferring to those investors money that he had received from others.
Although Merriman used some of the investors' money to buy and sell stock, beginning in about 2004, Merriman completely stopped trading. Through February 2009, he nevertheless continued to accept investor funds and continued to misrepresent that he was buying and selling stocks and that the investments were profitable.
Among the assets seized from Merriman during the investigation are: hundreds of pieces of fine and contemporary art, including works by Rembrandt, Merriman's Aurora, Colorado residence, other real property, collectible cars, motorcycles, a boat, eight E*Trade securities accounts, and firearms. The seized and forfeited assets will be used to compensate the victims of this crime.
Merriman faces up to 20 years in federal prison, up to a $250,000 fine, and asset forfeiture and/or restitution.
