Springs man pleads guilty in hedge fund fraud, theft
By James Paton, Rocky Mountain News
Saturday, March 15, 2008
Hamilton Alan Bird, a Colorado Springs man who persuaded hundreds of
people, many of them churchgoers, to invest in a hedge fund aimed at
helping the "little guy," pleaded guilty Friday to fraud and theft
charges.
Bird, 44, and two partners were accused of using investors' money to
set up a "personal piggy bank." His company, XL Capital Partners, used
the cash to pay for a jet, home improvements and inflated referral
fees, among other items, according to the 2006 indictment.
Bird is scheduled to be sentenced on June 13 and faces four to 12
years in prison for each of the two guilty pleas, according to Jean
Woodford of the attorney general's securities and financial fraud
unit. Bird is not eligible for probation, she said.
Bird, reached by cell phone after the court hearing Friday, declined
to comment.
Many investors said Bird failed to disclose a history of legal and
financial problems, including two prior criminal convictions, a 1991
bankruptcy and fines for operating in the insurance business without a
license.
Bird, whose financial career began in 1983 at the infamous Denver-
based penny stock company Blinder, Robinson & Co., defrauded investors
of nearly $8 million, authorities alleged. The Colorado Division of
Securities, which started the investigation, found that he attracted a
total of more than $20 million.
One investor was Wes Sprunk, an Arizona businessman who met Bird on a
trip to Cambodia arranged by Mission of Mercy, a part of the nonprofit
Bethesda Ministries, which helped to deliver food, medical aid and
"hope in Jesus Christ" to children. Bird's father-in-law was
Bethesda's former president.
Another client was the nonprofit Nicky Cruz Outreach.
Bird's colleague, former Colorado Springs pastor Doug Scott, was
convicted of fraud for his role in recommending the fund. Scott was
sentenced to 15 years of probation and 200 hours of community service,
Woodford said. She said she's also seeking restitution in that case.
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