Colorado's largest angel group just sued itself.

One co-founder of Denver Angels is accusing the other three of theft, racketeering, and securities fraud. The allegation is they created a new entity, siphoned the angel group's $30 million in assets into it, then used the old brand to raise a $20 million fund. When the fourth co-founder objected, they voted him out and his 20% stake is now worth zero.

The best part is one of the accused told the press they changed the name because it was "deceptive of what we were doing."

Angel investing runs on trust. The whole premise is that a group of individuals pool reputation, capital, and deal flow for mutual benefit. Nobody writes that contract expecting the people managing the pool to drain it into a private vehicle.

But, more often than you can believe, somebody always does.