Eight days after Michael Mendenhall was indicted for allegedly bilking 17 seniors of more than $1 million, prosecutors say he once again began asking elderly investors for funds.
A Denver grand jury indicted him April 13 on 27 felony counts of securities fraud and theft from at-risk adults.
Authorities say Mendenhall then deceived a would-be investor about those legal troubles before taking her money. He now faces an additional Class 3 felony count of securities fraud.
He appears in court Tuesday for a preliminary hearing on the new charge.
Mendenhall, 48, allegedly met his “marks” through the life-insurance company he worked at for more than 20 years.
Investigators believe he retained a company laptop and copies of his former clients’ files after he was terminated from Bankers Life and Casualty in October, according to a recent search-warrant affidavit.
Lela Gemmell, 81, had done business with Mendenhall for a decade. He visited her home April 22 with copies of her Bankers paperwork and persuaded her to cash out two annuities to invest $100,000 in a Florida-based company.
“We trusted him, and it sounded good, like he was on the level,” Gemmell said. “My health is not good. Michael knew that. . . . I couldn’t afford to lose that money.”
Gemmell’s son happened to run Mendenhall’s name through the Google search engine a few days later and learned of the pending fraud charges.
Gemmell told investigators that Mendenhall assured her that he had “cleared up everything with the DA’s office” and repaid all but one investor, according to the affidavit.
She nonetheless stopped payment on the six-figure check before it was cashed.
“My first thoughts were, ‘I’ve got to get my money back, and I don’t want anybody else to have to go through this,’ ” she said.
The corporation that Mendenhall sought funds for registered with the state of Florida in April 2010, but calls to the company’s phone number went unanswered.
Other investors were not so fortunate.
Prosecutors say that between April 13, 2006, and Aug. 24, 2010, Mendenhall promised elderly investors that the $1 million he collected from them would be used for real-estate acquisitions.
He allegedly promised the victims, who handed over tens of thousands of dollars each, higher rates of return than their annuities provided.
Instead, he used the money for personal expenses — a gym membership, car payments, his son’s college tuition and payments to his life partner — as well as to pay off other investors, the indictment said.
A judge on June 10 raised Mendenhall’s bail to a $1 million cash or surety bond in light of the newest charge.
He remains in custody at Denver Detention Center. His case has been transferred from a private attorney, who declined to comment, to the Denver Public Defender’s Office.
The search-warrant affidavit filed by a Denver district attorney’s office investigator describes another man Mendenhall approached for an investment after the indictment.
The man told investigators Mendenhall asked him for $79,000, though no charges have been filed related to that incident.
Gemmell said it’s not just money at stake when elderly investors fall prey to scam artists: “It’s the emotional impact on families. People ask, ‘Why did you sign that paper?’
“As seniors, we don’t think that people will do this to us.”
Jessica Fender: 303-954-1244 or jfender@denverpost.com
