A Colorado Springs man was convicted today of bilking some 400 hedge-fund investors of more than $12 million.
Douglas Scott, 48, faces up to 24 years in prison after an El Paso County jury took less than 4 hours today to convict him of two counts of securities fraud and theft. He will be sentenced March 9.
Scott and his lawyer, Terry Rector, could not be reached.
Scott, who used to be an evangelical pastor, wasn’t even licensed as a securities broker when he began luring investors into The Vision Fund, an unlicensed hedge fund, according to the state attorney general’s office.
Evidence at Scott’s trial showed he was paid $780,000 in referral fees in 2003 and 2004. He was working for XL Capital Partners in Colorado Springs.
Two XL partners were indicted in the scam, along with Scott. David Edward Newton pleaded guilty last year and is serving a probation sentence for his role in the fraud. H. Alan Bird goes on trial March 31.
The company spent $3.5 million in investors’s funds to buy an airplane, according to the attorney general’s office.
In the end, investors received about 40 cents for every dollar they invested. A total of more than $12 million in investors’ money was lost in the scam.
Scott agreed earlier to repay another $850,000, but it has not been confirmed if he actually repaid the money.
Mike McPhee: 303-954-1409 or mmcphee@denverpost.com
