Shawn Merriman: The Mormon Madoff’s Ponzi Scheme

Shawn Merriman, the Colorado investment adviser and former Latter-day Saints lay bishop known as the Mormon Madoff, ran a Ponzi scheme for roughly fifteen years that defrauded at least 67 investors of about $20 million, many of them fellow church members, friends, and family, including his own mother. In September 2010, a federal judge sentenced him to 151 months in prison and ordered him to pay more than $20 million in restitution.¹

How the Scheme Worked

Merriman started as a licensed stockbroker in 1989 and launched his own investment business in 1994 under the name Mountain Springs Partners, later operating as Market Street Advisors and through a chain of limited liability companies used to pool investor money. He told clients their money would go into stocks and options and promised annual returns of 7 to 20 percent.²

He lost about $400,000 in actual trading during his first year. Instead of telling anyone, he opened more LLCs to bring in new capital and used later investors’ money to pay earlier ones who wanted withdrawals.³ By 2004 he had stopped trading securities entirely, but he kept taking new money until early 2009.⁴ To keep the illusion alive, he mailed and later emailed fabricated account statements showing invented gains, and he offered existing investors an 11 percent “bonus” or “rebate” for putting in more.⁵

The money funded an expensive life. Federal investigators catalogued classic cars, motorcycles, motor homes, a cabin in Idaho, safari trips, a boat, and a large art collection with works attributed to Rembrandt and Albrecht Dürer.⁶ He even set up a dedicated LLC, Impressions Everlasting, to buy art with scheme proceeds.⁵

Why His Church Community Trusted Him

From 2001 to 2006, Merriman served as a lay bishop in his LDS congregation near Parker, Colorado.⁷ Prosecutors and reporters treated the case as a textbook example of affinity fraud, the kind of investment scam that works through tight-knit religious or ethnic communities.⁸

Every one of his investors came in through word of mouth: friends, family, neighbors, and fellow congregants who trusted him personally.³ According to CNBC, he framed access to his funds as exclusive, which discouraged victims from taking their questions to outside accountants or lawyers.⁸ Some clients handed over money from family trusts and retirement accounts.⁴ In 2008, before the collapse, the Church’s First Presidency had already sent a letter to congregations in the U.S. and Canada urging members to invest only with established institutions and licensed advisers.⁹

How It Fell Apart

Merriman ended the scheme himself. On March 18, 2009, he told his wife Andrea that his company was “a sham,” then contacted federal prosecutors and walked them through fifteen years of operations.¹⁰ His defense attorney, Patrick Ridley, said Merriman also called each of his clients directly to disclose what he had done.¹¹

On April 8, 2009, U.S. Marshals and U.S. Postal Inspectors seized assets from his Arapahoe County home, including nearly 200 works of art, classic cars, sports memorabilia, and other luxury items. Merriman estimated the haul at $7 million, though experts questioned the authenticity of many pieces.⁶ A separate government inventory counted 375 art items in all, 157 of them classified as Old Masters.¹² In late March 2009, the LDS Church excommunicated him for “conduct unbecoming a member.”⁷

Charges, Plea, and Sentence

Federal prosecutors in the District of Colorado charged Merriman by information on August 19, 2009, with a single count of mail fraud. He pleaded guilty on December 2, 2009, before U.S. District Judge Marcia S. Krieger, admitting to running the scheme from June 1, 1994, through February 24, 2009, and agreeing to forfeit all property tied to the proceeds. Because he cooperated, the government recommended twelve and a half years, below the twenty-year statutory maximum.¹³

The SEC filed a parallel civil action in April 2009 charging Merriman and Market Street Advisors with securities fraud and violations of the Investment Advisers Act.2 It settled in December 2011, with Merriman held liable for $20,124,183.13 in disgorgement, deemed satisfied by the criminal restitution order.¹⁴

Judge Krieger sentenced Merriman on September 14, 2010, after a seven-hour hearing. About 30 of the 67 identified victims attended, and six testified. She imposed 151 months in federal prison, three years of supervised release, and $20,124,183.13 in restitution.¹ She called the crime a “betrayal of family, friends and LDS Church members” and said, “These circumstances involve more than the theft of money from the victims. He also has stolen their hopes and dreams and security.”¹⁵

Davis McCann, a Parker construction worker who met Merriman through an antique car collection, told the court his family lost $2 million. “I worked in construction for 20 years for $8 to $10 an hour,” McCann said. “For every day I worked, you stole it from me. Every dime.” Vern Walter, a retired pediatrician and former neighbor who had attended the Merriman family’s Eagle Scout ceremony, testified that he lost $1.5 million. Merriman’s own mother, who lost her retirement savings, sent a letter read aloud by the prosecutor: “We’re still stunned at what he did and the scope of it. We’re still angry at his betrayal of our trust. We lost our money, but others lost everything. I hope you make him pay.”¹

What Victims Got Back

The government seized roughly $4 million in tangible assets and auctioned them to compensate victims, including fine art, antique cars, sports memorabilia, and safari trophies.¹ A 2012 U.S. Marshals Service online auction included a Rembrandt that drew a high bid of $68,000; other pieces went for as little as $30.¹⁶ The forfeited inventory also included a million-dollar home in Aurora, a motor home, and boats. By mid-2013, disbursement checks from the U.S. Marshals were reaching victims at roughly 16.5 cents on the dollar, well short of the $20.1 million restitution figure.¹⁷

The Family After

Andrea Merriman has said she knew nothing about the fraud until the day her husband confessed. The government seized the family’s assets, leaving her, in her words, “nearly penniless” with four children, the youngest three years old. Facing hostility from victims and former friends in Colorado, she eventually moved with the kids to Utah.¹⁸¹⁰

She started a blog in 2010, wrote a book called Everything Collapsed Except Me, works as a certified Gallup Strengths Coach and Career Director at Brigham Young University, and speaks publicly on resilience, fraud awareness, and forgiveness.¹⁹ Her first TikTok video, about the first twenty-four hours after learning the truth, drew more than 10 million views.¹⁸ She has since remarried, and her three oldest children have completed college.

1
The Denver Post. Ponzi Schemer Merriman Gets 12 1/2 Years in Prison
2
U.S. Securities and Exchange Commission. SEC Litigation Release No. 20992
3
U.S. Department of Justice. Verified Complaint for Forfeiture In Rem
4
U.S. Department of Justice. Shawn Richard Merriman Sentencing Press Release
5
U.S. Securities and Exchange Commission. SEC Complaint, Case 1:09-cv-00786
6
The Denver Post. Value of Merriman’s Treasures Doubted
7
Bishop-Accountability.org. Merriman Excommunication Report
8
CNBC. The Mormon Madoff: How Shawn Merriman Scammed Millions
9
The Church of Jesus Christ of Latter-day Saints Newsroom. Affinity Fraud Official Statement
10
KSL. Family Rebuilds, Finds Happiness After Father Imprisoned for Fraud
11
ABC News. Shawn Merriman Ponzi Scheme
12
U.S. Department of Justice. Shawn R. Merriman Asset Seizure Press Release
13
The Salt Lake Tribune. Merriman Sentencing
14
U.S. Securities and Exchange Commission. SEC Litigation Release No. 22212
15
The Salt Lake Tribune. Merriman Sentencing
16
CNN. Forfeited Art Auction
17
9News. Victims of Local Ponzi Scheme to Get Money
18
People. Woman Married to the Mormon Madoff Speaks Out
19
AndreaMerriman.com. Andrea Merriman