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Springs man pleads guilty in hedge fund fraud, theft

By James Paton, Rocky Mountain News (Contact)

Published March 15, 2008 at 12:05 a.m.

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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.

patonj@RockyMountainNews.com or 303-954-2544