An Austin federal judge is considering whether Russell Erxleben is eligible for bail after his January arrest in what prosecutors say was a series of foreign trading schemes that bilked dozens of investors.
In a detention hearing Friday, prosecutors portrayed the former pro football player as a savvy manipulator who would pose a threat to the public if released, offering new testimony from an inmate they said Erxleben tried to hire to intimidate a key state witness. But Erxleben’s lawyers cast doubt on the credibility of the allegations and contended that house arrest was a viable alternative.
U.S. District Judge Lee Yeakel refrained from making a decision Friday, saying he wanted more time to examine both stances and determine whether there was absolutely no combination of supervision conditions outside of incarceration that could keep Erxleben from breaking the law.
The detention hearing was the second for Erxleben, a former NFL punter and three-time All-America kicker at the University of Texas who was denied bail in May by a federal magistrate judge. He is accused of masterminding fraudulent investment operations as far back as September 2005, including a massive Ponzi scheme that paid out more than $2 million in nearly four years.
In that enterprise, court records say, he encouraged clients to funnel their dollars into defaulted post-World War I German government gold bearer bonds — instruments of indebtedness issued by Germany in the 1920s and 1930s that have a disputed financial value.
In court Friday, Lance Henne, who has convictions for forgery, counterfeiting checks, possessing stolen mail and escaping from custody, said he met Erxleben in June while serving time for a drinking violation at a halfway house.
Erxleben often complained about his case, saying the allegations against him were false, and offered to pay Henne $50,000 to deliver a message to a witness who was Erxleben’s former friend, neighbor and investor, Henne testified. The money was buried in plastic bags in the backyard of his Dripping Springs home, Henne said Erxleben told him.
“At first, I just thought he was blowing off steam. … I thought he was upset,” Henne testified. He said he realized Erxleben was serious when Erxleben left a handwritten note in Henne’s bunk with the personal information of the witness he wanted Henne to intimidate, as well as that of the man’s wife and children — including names, addresses, phone numbers and “a list of the kids’ names and their schools.”
The original note, presented to the court by prosecutors, also had the names and locations of places the witness frequented, such as a gym, and the times he tended to be there, said Michael Fernald, an Internal Revenue Service agent with the criminal investigations division.
Defense attorneys called into question the authenticity of the note, implying that it could have been forged. In response to questions from the state, Henne said he had not.
In other testimony Friday, prosecutors delved into evidence presented at Erxleben’s first detention hearing, where witnesses said that he made statements about killing himself before going back to prison and that he made death threats to customers who complained or asked for their money back.
Erxleben warned that he had affiliations with a cartel and the Mexican Mafia, a criminal gang he claimed would do his dirty work and whose members were some of his investors, prosecutors said. In that hearing, U.S. Magistrate Judge Andrew Austin said Erxleben posed a financial threat.
Defense attorneys have argued for Erxleben’s release, saying he has never owned a gun and has no history of violence. On Friday, they said all the evidence that the former athlete had attempted to intimidate others came from less than half a dozen witnesses who were frustrated about losing money and could have been considered criminally liable.