Mueller gets 8 years for $8.5 million ING fraud

Nathan John Mueller, the lone architect of an $8.5 million embezzlement fraud that lasted four years, was sentenced Monday to just over eight years in prison for a crime that his attorney said was driven by "helplessness [and] hopelessnesss" over lack of advancement at employer ING Reinsurance Corp.

Mueller, who used proceeds from his crime to pay for gambling trips to Las Vegas and visits to Schieks "gentleman's club" in downtown Minneapolis, received the low end of the advisory sentencing range at the urging of federal prosecutors, who said he helped locate assets that could be seized for restitution.

According to the mail fraud charge against him, Mueller, 35, who lived in Eden Prairie at the time, routinely requisitioned and cashed checks from ING accounts that he kept for himself from 2003 until 2007. His attorney, Joseph Tamburino, called the scheme "boldly simple."

ING employees eventually caught Mueller after he had requested 99 checks for pseudo companies with names similar to ING clients. Mueller personally collected the checks, but none of them exceeded $250,000, which allowed him to stay below the company's fraud detection radar for years, Tamburino said.

Mueller joined ING Reinsurance in 1997 to do account reconciliation and data entry works. In a presentence motion seeking leniency on Mueller's mail fraud count, Tamburino wrote that Mueller had believed that hard work and long hours would propel him up the corporate ladder. But promotions were few and his job duties "were essentially identical" after five or six years.

"He became very discouraged at seeing others who he felt were poor employees but good social networkers being promoted ahead of him," Tamburino wrote.

Eventually, he said, Mueller became depressed and began to drink heavily. Tamburino said Mueller decided to manipulate the ING accounting system by using his electronic password to request a check for the entities he created and use the passwords of other employees in the department to approve the checks.

"Mueller knew this was not a foolproof plan," Tambarino said. "He was in such a state at the time that not only did he not care if he was caught, he was in fact simply waiting for it."

In the meantime, though, Mueller lived so lavishly that people he befriended believed him when he told them he had won a $93 million lottery prize.

According to federal prosecutors, "Most of the ill-gotten funds were spent on extravagant or corrupt behaviors, including substantial gambling losses, gifts to friends and acquaintances and adult entertainment."

In other words, generous tips to exotic dancers.

"The extent of Mr. Mueller's deceit is substantial and tragic," Assistant U.S. Attorney John Marti wrote in court papers. "Given the turmoil that our country's financial services sector currently faces, there is a substantial need for substantial punishment to afford adequate deterrence to criminal conduct."

Under the advisory federal sentencing guidelines, Mueller could have received up to 121 months in prison rather than the 87 months he got. Marti said Mueller's cooperation with his former employer and the government warranted a sentence at the lower end of the range.

David Phelps • 612-673-7269