Double Injustice

Mueller is not charming, or endearing, or very intelligent. He's a standard-issue schmoozer, an ordinary salesman full of shallow bonhomie, possessing one fatal attraction: a twinkle of the eye that winks seductively to the little grifter hiding inside us all.

"What's a little extra profit between friends?" the confidential sparkle promises.

Blinded by Mueller's high interest rates, the suckers tended not to ask questions about where their money was being "invested" -- until it was gone. Today, their common wail is: "I should have known it was too good to be true."

And that's how a good con works: It co-opts the conned.

In other words, Mueller's victims helped scam them- selves. They came to believe that Mueller was "a rich man who wanted to help his friends," as one said. They believed in Mueller's genius and good intentions because he dressed well, drove fancy cars, flew fancy airplanes, lived in a fancy house, and picked up the tab in gourmet restaurants. He smelled of wealth. He giggled like a rich kid. And they believed, in part, because they wanted to believe.

"They came to me," said Mueller in a jailhouse interview, no longer giggling. "They were greedy. I got pushed in. They would say, 'I have $10,000. How much interest will you pay?' I'd say 35 percent. It was like a wheel that could not be stopped."

The key to the making of a sucker is to determine what the mark wants to hear, and then tell it to her; to pay profits on increasingly large "investments" until -- bleary-eyed with avarice -- the mark pumps all of her capital into the Ponzi in one huge attempt to hit the jackpot. Then the schemer kisses the mark off and repeats the swindle with the next sucker, using the previous sucker's money as bait.

The pyramid scheme collapses when the con man runs out of cash to make the payments necessary to string the suckers on. Some con men choose that moment to leave town. Mueller stayed, hoping that his father-in-law would bail him out, or that lightning would strike him in the stock market, or on the blackjack table.

Mueller was, in reality, a business fool. His only talent was that he knew how to fool other fools.

"He was brilliant at money math," says Brian O'Neill. "He could instantly calculate amortization tables and interest rates. You just felt like you were in good hands."

O'Neill, a realtor who shared offices with Mueller, was an unwitting shill for the con man. He roped his own parents into Mueller's network, along with his ex-wife, his brother, and numerous business associates. O'Neill chose to believe, as they did, that Mueller would bless him with his magic dollar wand, showering him with money because they were friends.

When anxious investors asked for their money back, Mueller pacified them with worthless collateral, such as unrecorded deeds of trust on heavily mortgaged real estate. When they could no longer be soothed by smooth promises, Mueller stopped returning their phone calls.

In total, Mueller conned $26 million from 140 suckers, including his father-in-law. He threw much of it away on gaming tables, or bad stock purchases. The rest bought a Me Decade lifestyle adorned with recreational aircraft. Then, in December 1994, the party pooped: Mueller declared bankruptcy. Horrified creditors scurried about, figuratively looking under the con man's couch cushions for pennies, pesos, drachmas -- anything of value that might offset their unthinkable losses. When they learned that Mueller had borrowed $18 million from his wealthy father-in-law, Dr. Jewell, hope for repayment blossomed -- only to wilt when it became obvious that Mueller had squandered everything, including Jewell's largess.

The federal bankruptcy court in San Francisco seized Mueller's estate. Forty-three volumes of legal papers piled up as a dozen law firms circled the bankruptcy, sniffing the carcass for fees. Finally, the nearly asset-free case was assigned to U.S. bankruptcy trustee Jeffry G. Locke for liquidation.

Locke quickly realized that the estate was so utterly broke it couldn't afford to pay him. So he concocted an ingenious -- if morally brutal -- method of pulling in legal tender. He decided to "churn" the estate, which is akin to deep-plowing a barren field to force a second harvest from it.

Mueller was financially dead, Locke appeared to reason, but his victims were only wounded.

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The California Constitution makes it a felony to charge more than 10 percent interest on personal loans. There are exceptions. Credit card companies can charge as much as the market will bear; real estate loans can be pegged higher.

Although they didn't know it at the time, most of Mueller's victims violated California's usury law simply by accepting the con man's promise to pay a higher-than-allowed interest rate. So, using a law intended to protect consumers from predators, Locke sued three dozen victims, threatening to heave the book at them for committing usury if they did not return loan repayments received as part of Mueller's Ponzi scheme.