Former NFL Linebacker Sentenced To 40 Years For Role in $10 Million Ponzi Scheme

Merrill Robertson and his business partner targeted senior citizens and University of Virginia coaches.

Former NFL linebacker Merrill Robertson was sentenced to 40 years in prison today.
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Merrill Robertson and his business partner targeted senior citizens and University of Virginia coaches.

A federal judge today sentenced former Philadelphia Eagles and University of Virginia linebacker Merrill Robertson to 40 years in prison for his role in a $10 million Ponzi scheme that targeted senior citizens and Robertson’s former coaches.

On August 24, a jury convicted Robertson of 15 offenses, including bank fraud, mail fraud, wire fraud, and money laundering after the government produced evidence showing that Robertson and his business partner, Sherman Carl Vaughn, raised more than $10 million, returned approximately $4 million to the original investors, a key to all Ponzi schemes, then used $6 million for personal expenses.

The original Securities and Exchange Commission (SEC) investigation showed Robertson and Vaughn used the money for “cars, family vacations, spa visits, luxury gifts, educational expenses for family members and a luxury suite at a football stadium.”

Federal prosecutors said Robertson and Vaughn told investors their firm, Cavalier Union, was involved in a diverse number of businesses, including restaurants, real estate, alternative energy and natural resources assets.

The only businesses they really owned were the restaurants, but they went to great lengths to convince potential investors there was more to Cavalier Union, including a website listing their businesses and false financial statements.

Robertson and Vaughn’s investors were carefully chosen either for their lack of business knowledge or their close relationship to Robertson, according to the SEC complaint.

“Defendants targeted unsophisticated senior citizens and former football coaches, donors and alumni” of schools Robertson attended and teams for which he had played, including the University of Virginia, where he was a standout linebacker, Fork Union Military Academy, and the National Football League, where he played for the Philadelphia Eagles in 2003.

Robertson eventually had more than 60 investors but began running out of new investors and became involved in a loan fraud scheme, according to court documents.

Ironically, SEC documents show Cavalier Union was already insolvent just a short time after it launched, and even the businesses that did exist, including the restaurants, all eventually closed.

Merrill Robertson was sentenced to 40 years in prison for his role in a $10 million Ponzi scheme.
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Robertson went back to his investors and told them he could help them gets loans and obtain lines of credit. He submitted falsified loan applications to banks and credit unions.

Robertson and Vaughn told potential investors that Cavalier Union was registered with the SEC, but the SEC report says that no steps were ever taken to register the company.

Court documents indicated Robertson’s scheme continued through March 2016.