AUSTIN -- Federal agents with the Internal Revenue Service arrested a former University of Texas football player at his home early Thursday morning. Russell Erxleben, 56, is facing federal money laundering charges. A judge issued a warrant for his arrest and a sealed indictment has been filed in the United States District Court Western District.
At 2 p.m. Thursday, Erxleben appeared before U.S. Magistrate Judge Mark Lane.
KVUE News has learned Erxleben is accused of a running a ponzi scheme that generated more than $2 million. An eight-count federal grand jury indictment returned Tuesday and unsealed Thursday charges the Dripping Springs resident with five counts of wire fraud, one count of securities fraud and two counts of money laundering.
According to the indictment, from 2005 to October 2009, Erxleben devised a scheme to defraud and obtain money from investors by the use of fraudulent promises.
According to a news released issued by the U.S. Attorney's Office, Erxleben used several companies including WALTEC Consultants, LRE Holdings and The MDM Group to promote investments, namely, in post-WWI German government gold bearer bonds and in work of art said to be by Paul Gauguin, a famous late 19th-early 20th century artist.
The indictment further alleges Erxleben used investment proceeds for the benefit of himself and his family and to pay dividends to previous investors. Prosecutors say he made various wire transfers using numerous financial accounts which were opened and maintained by others, including one or more family members, in an effort to avoid detection. The indictment goes on to say Erxleben failed to disclose to investors his 1999 federal felony criminal convictions for securities fraud as well as the fact that he owed $28 million in restitution.
If convicted, Erxleben faces up to 20 years in federal prison for each of the wire fraud and securities fraud counts and up to 10 years in federal prison per money laundering count.
According to KVUE News archives, Erxleben was raised in Seguin, Texas. He was recruited as a top prospect at The University of Texas in 1975. Coaches say he quickly became known as a reliable kicker for the Longhorns.
Erxleben became a record-setting UT football player and currency investor. While playing for UT he achieved the shared record for the longest field goal in NCAA history. He was an All-American punter in 1976, 1977 and 1978. Drafted in the first round, Erxleben had short NFL career as a kicker, playing six seasons for the New Orleans Saints. The Saints released him in 1983. He made a comeback four years later with the Detroit Lions but retired permanently in 1988.
According to news archives, Erxleben became a currency investor and was charged with securities fraud and sentenced in 2000. He was released from federal prison in 2005.
After retiring from the NFL, Erxleben became a financial investor in foreign exchange trading. He founded Austin Forex International in Austin. Erxleben pleaded guilty to one count of conspiracy to commit securities fraud, mail fraud and money laundering and second count for securities fraud in 1999. That investigation was conducted by the Texas State Securities Board and the IRS.
According to KVUE archives, the investigation stemmed from misleading statements related to the past performance of Austin Forex.
Erxleben was sentenced by U.S. District Court Judge James R. Nowlin in September, 2000. He spent 84 months in prison and had to pay $28 million in restitution as well as a $1 million fine.
He settled a similar lawsuit for $22 million in 2000.