DENVER—A federal judge has sentenced a Utah man to 41 months in prison for running a Ponzi scheme that targeted 79 residents of the Four Corners area.
The Durango Herald reports ( ) that Frederick H.K. Baker was sentenced Friday after pleading guilty this summer to two counts of wire fraud and conspiracy. Federal prosecutors argued that Baker and Mark Akins, a former Durango resident, took in $1.7 million in the scheme, which began in 2006.
Akins faces a 49-count indictment claiming he marketed Baker’s scheme to unwitting investors. His trial is scheduled Jan. 3.
Authorities said Baker first approached a Durango resident in 2006, claiming he could make money off currency market fluctuations. Other investors followed, and some lost their homes or life savings, said Assistant U.S. Attorney Robert Mydans.
“The actions of Mr. Baker have destroyed families, have caused divorces,” Mydans said.
Baker invested the money in other Ponzi schemes, realizing that Ponzi schemes typically pay initial investors well but wipe out later investors, said his attorney, Matthew Belcher.
District Judge Philip Brimmer also ordered Baker to pay $776,000 in restitution. Baker said his family, left destitute when the scheme unraveled, is setting aside $400 a month for victims.
“I know that that’s not enough, but I’ll do whatever is honorable and do my best to pay this back as best I can,” Baker said.
Prosecutors said Baker used accounts with a company called e-Bullion to transfer money. Attorneys in the case recently learned that federal agents in California seized e-Bullion’s computer servers in a separate fraud investigation.
Akins’ attorney, Martin Stuart, said Akins may not have realized that Baker was operating a Ponzi scheme. But Brimmer on Thursday rejected a request to have most counts against Stuart dismissed.
