Duluth prison camp inmates describe ease of falling into white-collar crimeNathan Mueller went to work every day as an accounting manager at ING Reinsurance Corp. in Minneapolis feeling like he had a pot of gold under his desk. Finally, he couldn’t resist and tapped it for $8.5 million during a four-year embezzlement.
Nathan Mueller went to work every day as an accounting manager at ING Reinsurance Corp. in Minneapolis feeling like he had a pot of gold under his desk. Finally, he couldn’t resist and tapped it for $8.5 million during a four-year embezzlement.
Brad Weaver considered himself a winner. As a Chicago hedge fund manager, he didn’t want to tell his clients that he made a bad call. Rather than admit defeat, he clicked his computer mouse and in an instant co-mingled $22.5 million in client money in making a trade. But he didn’t tell his clients he was using their money. He lost $3 million of their money.
Mueller and Weaver both got caught and are spending time in Duluth as residents of the federal prison. Mueller pleaded guilty to mail fraud and is three years into an eight-year sentence. Weaver pleaded guilty to wire fraud and is nearly six years into a 12½-year sentence.
Mueller has an accounting degree from Gustavus Adolphus College in St. Peter, Minn. Weaver has degrees in economics and finance from Purdue University in West Lafayette, Ind. These days they are helping their fellow inmates at the prison by working in the employment resource center there, where they promote continuing education, a GED program, resume workshops and job fairs to help men less educated than themselves adjust when they return to society.
On Tuesday, Mueller and Weaver told their stories to Duluth business women and men at a monthly Chamber of Commerce forum sponsored by the Duluth News Tribune in the Play Ground Theatre in the Tech Village.
When interviewed afterward, neither man made excuses for their bad judgment or greed.
“We are you,” Weaver said. “We didn’t come from broken families. We are well educated. We didn’t want for much when we were growing up. We had families that told us right from wrong. They parented us very well, but yet I still ended up here. It can happen to anybody.”
“It’s a lot easier than people think,” Mueller said. “I was aware that what I was doing was a crime, but to cross that line was so easy and I crossed the line and went to the other goal line. You just have to remember as a business person to think about what you are doing and make sure you are never crossing the line by even one inch. It’s kind of like a gateway drug. It was easy after I did that first check to just carry it all the way down the field and it got out of control really easy.”
Mueller told the business people that he had so much control at his company that he was cutting checks, picking up checks, approving checks and intercepting checks as he became bolder and bolder.
He set up a fraudulent company that had a name similar to one of the company’s clients. The first check he cut to his company was for $27,053. One day he wrote himself a check for $400,000. When he deposited checks in the bank he was so nervous he expected an FBI agent to jump out from behind a teller. But he found out the stealing was easy.
The first year he stole $1 million, the second year $2 million, the third year $4 million and while trying to get out he dropped to $1 million in stolen money the fourth year.
“I was scared and guilty and sweating every day when I went to work,” Mueller said. “Every day was going to be the day the FBI was taking me down in my office. It was a horrible feeling.”
To hide his wealth he took junkets to Las Vegas 40 times in the four years. He calls it the “social laundering” of stolen money. He would spend $30,000 in a slot machine to win $15,000 and then tell friends that he won $15,000. He also had some freakish luck. His ex-wife’s relatives didn’t believe his gambling success stories. But she saw him win jackpots of $30,000 and $100,000. He said he won $178,000 gambling the first year, $370,000 the second year, $800,000 the third year and $1.3 million the fourth and final year. But he could blow $200,000 in a weekend.
Then a co-worker, a woman that he considered like a sister, caught on to what he was doing. She turned him in. It was a relief, he said.
“I wanted to stop, but I didn’t have the strength and courage to stop,” he said. “I still felt guilt for what I was doing to everyone around me and to the company. I was waiting to be caught and out of the dark place I was in. Getting caught, I didn’t need to hide anymore. I could make the turn and head back out.”
Patrick Heffernan, a financial planner and partner at Wheeler Associates, appreciated the inmates’ candid look at white-collar crime.
“I think when you hear about criminals in prison you think of kind of the real dramatic things that are often on TV shows,” he said. “But these guys showed that a lot of times the boundaries above the rules are sometimes a little blurred and sometimes some decisions spiral out of control. I was just amazed how Nate, in the end, realized that the only way for this to stop was for him to get caught, and that was a relief.”