The Colorado grand jury has alleged that Hamilton Alan Bird, indicted in 2006 for bilking $7.5 million from hundreds of investors in the western United States, began a second scam in which he collected $690,000 from investors in seven states, including Colorado.
Money from the second scam was used to pay his defense lawyer in the first case and to purchase furniture and cars, the grand jury alleged in an indictment returned today.
The second purported securities swindle started in January 2006 and continued through September 2008, the indictment alleges.
In the first case, Bird pleaded guilty on March 14, 2008, to one count of securities fraud and in September 2008 was sentenced to 24 years in prison.
The Colorado Division of Securities filed a lawsuit against Bird in the first case in February 2005. In May 2007 a Denver District court judge entered a $12.6 million judgment and injunction against Bird.
“This case is remarkable not only for the breadth and the number of investors affected, but also because Mr. Bird perpetrated a portion of this fraud while criminal proceedings were pending against him in a securities fraud case brought by the Attorney General’s Office,” said Colorado Attorney General John Suthers in a statement.
In order to deceive investors in the second scam, Hamilton used two different names, “Alex Davis” and “Al Byrd” and failed to disclose either the indictment brought against him or the action of the Colorado Division of Securities, said the grand jury.
According to today’s indictment, Bird operated a Nevada-based company, EquityFX, Inc., which pitched consumers on foreign exchange currency investments that promised a high rate of return.
The grand jury said that an analysis of Bird’s banking activity from January 2006 through September 2008, showed that of the $690,000, approximately $436,000 was deposited into the foreign trading accounts used by Bird for EquityFX.
He used the rest of the money to pay legal fees to his lawyer in the first case and to buy furniture and cars, said the grand jury.
He used $90,000 of the $690,000 as payouts and profits to other investors, said the grand jury.
In the second case, the grand jury said Bird failed to disclose the actual risk of investments. Bird told investors that there was little or no risk, indicating that their money would be used for trading in foreign exchange currency markets, utilizing his system of trading which minimized any risk of loss, said the grand jury.
However, said the grand jury, the actual risk of loss to investors “was significant”.”
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
