Hundreds of retirees sold their annuities and invested the money in a scheme devised by a San Antonio investment advisor that eventually reached $58 million, the Securities and Exchange Commission said Friday.

Robert J. Mueller, deeproot Funds and several companies controlled by Mueller have been charged in civil court with fraud for carrying out the investment venture that netted Mueller personally more than $3 million, some of which was used to pay for his two weddings and a divorce, the SEC said. The scheme, which played out between 2015 and February 2021, involved nearly 300 investors, many of whom were retirees, the SEC said.

The SEC complaint alleged that Mueller and deeproot Funds were investment advisors to two pooled investment funds that Mueller created. According to the complaint, Mueller and deeproot convinced the investors to cash out annuities and individual retirement accounts they held with other investment companies and put the assets in his two funds. The funds involved were named the deeproot 575 Fund and the deeproot Growth Runs Deep Fund.

Mueller funneled more than $30 million of the funds' assets to other businesses he controlled, and used at least $820,000 of new investor money to pay earlier investors, the complaint said. Mueller and deeproot, acting through Policy Services, another entity Mueller owned, paid Mueller about $1.6 million in salary that was not adequately disclosed to the funds or their investors, while also misappropriating about $1.5 million to pay Mueller's personal expenses, the SEC said.

Mueller and deeproot told investors the two funds would invest in life insurance policies and deeproot-related businesses to provide relatively safe returns to investors, the complaint said. For the 575 Fund, investors committed their principal investment for five years and elected to receive either simple annual interest of 7% per year paid out in a lump sum at the end of the five-year term, or 5% simple annual interest paid out in monthly installments for each of five years, thus, the “5-7-5” in the fund’s name, the complaint said.

For the deeproot Growth Runs Deep Fund, investors committed their principal investment for an undetermined time and were promised they could receive a potentially larger payout upon the maturity of a life policy investment, the complaint said.

Mueller and deeproot commingled the money in deeproot and Policy Services bank accounts and spent less than $10 million to purchase life insurance policies for the funds. They also purported to include life insurance policies as assets of the funds that Mueller and Policy Services had purchased for Mueller’s earlier investment funds. Notably, no insurance policies were purchased after September 2017, despite raising about $43 million for the funds after that time, the complaint said.

The vast majority of the investments were used like a “piggy bank” for other business entities Mueller controlled, the complaint said. The alleged actions forced Mueller and Policy Services to default on the purchase of one $10 million face value life insurance policy, losing nearly $3.5 million in the process, the complaint said. Mueller and deeproot also made more than $820,000 of Ponzi-like payments to earlier investors in the funds using money raised from new investors, and made at least $177,000 in payments from money borrowed on a short-term basis using the life insurance policies as collateral, the SEC said.

The complaint also alleged Mueller used more than $1.5 million of the money to pay for such things as his daughter’s private school tuition, vacations with his family, his second wedding, his second divorce, his third wedding, jewelry for both his second and third wives, and to buy a condominium in Kauai, Hawaii.

The SEC complaint, which was filed in U.S. District Court in San Antonio, is seeking civil penalties, disgorgement of ill-gotten gains with interest, and permanent injunctions.