COLORADO STATE GRAND JURY INDICTMENT

Transcription

1 DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO 1437 Bannock Street Denver, CO PEOPLE OF THE STATE OF COLORADO, Plaintiff, v. HAMILTON ALAN BIRD, DOB: 08/14/1963 Defendant. JOHN W. SUTHERS, Attorney General MICHAEL J. BELLIPANNI, Assistant Attorney General* 1525 Sherman Street, 7 th Floor Denver, CO Registration Number: *Counsel of Record COURT USE ONLY Case No.: 09CR0001 Div. 6 COLORADO STATE GRAND JURY INDICTMENT Of the term of the Denver District Court in the year 2010; the Colorado State Grand Jurors, chosen, selected and sworn in the name and by the authority of the People of the State of Colorado, upon their oaths, present the following: ESSENTIAL FACTS Hamilton Alan Bird (BIRD) owned and operated EquityFX, Inc., a Nevada company, which he operated from Colorado. Beginning in or about January, 2006 and through September, 2008, BIRD solicited money from investors by and through this company. The investments offered by BIRD promised high rates of return. The solicitation for investments was premised upon the representation that the funds would be used for foreign exchange currency trading. BIRD had control of several investment accounts, which he had set up for the purpose of foreign exchange currency trading. BIRD did not use all of the investor funds in the manner represented. Much of the investment money was used by BIRD for personal expenses, to falsely show trading profits and make payouts to other investors.

2 BIRD solicited and received investments from Colorado investors in El Paso and Weld counties. BIRD also solicited and accepted investments from individuals from several other states, including: Oklahoma, Arizona, New Jersey, California, Texas and Illinois. The funds for these investors were deposited, by BIRD or through wire transfer by the individual investors, or at BIRD S direction, directly into one of BIRD S Colorado bank accounts. BIRD solicited and directed investments from investors into his bank and trading accounts, resulting in investor losses of hundreds of thousands of dollars. BIRD solicited and accepted investment amounts of up to one hundred thousand dollars ($100,000). Some investors received documentation to evidence their investments; other investors received statements, spreadsheets, and computer screenshots generated by BIRD to show the purported value of their investments, other investors received no documentation at all. BIRD collected over half a million dollars from these investors for the purposes of trading in foreign exchange currency markets. The EquityFX investments offered and sold by BIRD, constitute securities pursuant to (17) C.R.S., and as such, are subject to the provisions of the Colorado Securities Act. In soliciting investors for, and engaging in an act, practice, and course of business of, the sale of securities, BIRD made material, untrue statements and omissions of material facts, including one or more of the following: BIRD did not trade in Foreign exchange currency with all of the investor funds. BIRD failed to deposit some of investor funds into the foreign exchange investment accounts under his control. Analysis of BIRD S banking activity from January 2006, through September, 2008, shows investor funds as the source of approximately six hundred ninety thousand dollars over the time period analyzed, of that amount, only approximately four hundred thirty six thousand dollars was deposited into the foreign exchange currency trading accounts used by BIRD for EquityFX. BIRD diverted a portion of the money invested in EquityFX for his own personal use or benefit. Analysis of BIRD S banking activity from January 2006, through October, 2008, shows payments to BIRD individually, payments to his family, and cash withdrawals, of over two hundred thousand dollars. The personal use of funds engaged in by BIRD included purchases of furniture, car payments, and payments to his defense attorney in a pending criminal matter. Furthermore, BIRD used investor funds to pay other investors; BIRD used approximately ninety

3 thousand dollars ($90,000) of investor funds as payouts and profits to other investors. BIRD failed to inform investors that he suffered trading losses in EquityFX, and what those losses were. BIRD based his representations to investors upon his ability to trade in foreign exchange currency markets with little or no risk of actual loss to the investor. BIRD suffered cumulative trading losses from January 2006 through September of 2008 in EquityFX. BIRD failed to disclose the total losses he suffered in the trading accounts to any investor, including substantial cumulative losses. BIRD failed to inform investors that he had been involved in previous civil and criminal litigation for past business conduct resulting in judgments and convictions. Bird failed to disclose to investors his other civil suits relating to himself and his former businesses which resulted in judgments against him, and that remained unsatisfied. Bird also did not disclose to investors that on or about March 29, 1994, he had been convicted of felony Theft in El Paso District Court case number 1989CR2191. Bird also failed to inform investors that he had been convicted of False Statements to IRS in US District Court for Colorado, case number 1993CR379. Bird did not tell the investors he solicited that he had civil and criminal proceedings pending against him during the time he accepted investments in EquityFX. BIRD did not advise any of the investors that on or about February 3, 2005, the Colorado Division of Securities filed an action against him alleging violations of the Colorado Securities Act. BIRD did not advise any of the investors that on or about May 12, 2006, he was indicted on charges of Securities Fraud and Theft by the Colorado Statewide Grand Jury, resulting in the filing of El Paso District Court case number 2006CR002371, and that he remained on bond in that case until its termination. BIRD did not advise any of his investors that on or about May 17, 2007, he was the subject of a Permanent Injunction and Order of Judgment for twelve million six hundred thousand dollars ($12,600,000) in Denver case 2004CV9931, as a result of the Colorado Division of Securities action. BIRD did not advise any of the investors that on or about March 14, 2008, he pled guilty to one count Securities Fraud, a class three felony, and one count Theft, a class three felony, in El Paso District Court, case number 2006CR Nor did BIRD advise any of the investors in EquityFX that he was set to be sentenced in that case on June 13, 2008, and ultimately sentenced on September 5, BIRD failed to disclose the actual risk of the investments. BIRD told investors that there was little or no risk of loss, indicating that their

4 money would be used for trading in foreign exchange currency markets, utilizing his system of trading which minimized any risk of loss. The actual risk of loss to investors was significant. In furtherance of his course of business, BIRD concealed his true identity to some investors. Hamilton Alan Bird misrepresented his name to these investors by maintaining a false identity using different names, including, Alex Davis and Al Byrd. BIRD also concealed the actual use and value of investor funds throughout the operation of the business of EquityFX by misrepresenting the value of the funds after those funds were invested. BIRD provided to some investors various falsely created spreadsheets, screenshots and statements, of the value of the invested funds, knowing those representations to be untrue. BIRD provided some investors with fraudulent statements of investment accounts indicating that they were profiting from his foreign exchange currency investment account activity. The evidence BIRD showed the investors of his trading account status did not accurately reflect the actual account status at the time. COUNT ONE (Securities Fraud F3) On or about January 18, 2006 in and triable in the State of Colorado, Hamilton Alan Bird, in connection with the offer or sale of any security to Shauna Chanda directly or indirectly, unlawfully, feloniously, and willfully made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, contrary to the form of the statutes in such case made and provided, C.R.S (1) (b) and (1), (Securities Fraud Class 3 Felony), against the peace and dignity of The People of the State of Colorado. COUNT TWO (Securities Fraud F3) On or about January 19, 2006, in and triable in the State of Colorado, Hamilton Alan Bird, in connection with the offer or sale of any security to Michael and Cynthia Edwards directly or indirectly, unlawfully, feloniously, and willfully made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not

5 misleading, contrary to the form of the statutes in such case made and provided, C.R.S (1) (b) and (1) (Securities Fraud Class 3 Felony), against the peace and dignity of The People of the State of Colorado. COUNT THREE (Securities Fraud F3) About and between December 1, 2006, and July 18, 2007, in and triable in the State of Colorado, Hamilton Alan Bird, in connection with the offer or sale of any security to Martha Hund directly or indirectly, unlawfully, feloniously, and willfully made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, contrary to the form of the statutes in such case made and provided, C.R.S (1) (b) and (1),, (Securities Fraud Class 3 Felony), against the peace and dignity of The People of the State of Colorado. COUNT FOUR (Securities Fraud F3) About and between April 12, 2007, and May 2, 2007, in and triable in the State of Colorado, Hamilton Alan Bird, in connection with the offer or sale of any security to Allen Pedersen directly or indirectly, unlawfully, feloniously, and willfully made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, contrary to the form of the statutes in such case made and provided, C.R.S (1) (b) and (1) (Securities Fraud Class 3 Felony), against the peace and dignity of The People of the State of Colorado. COUNT FIVE (Securities Fraud F3) About and between May 8, 2008, and June 30, 2008, in and triable in the State of Colorado, Hamilton Alan Bird, in connection with the offer or sale of any security to Ron Richerson, directly or indirectly, unlawfully, feloniously, and willfully made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not

6 misleading, contrary to the form of the statutes in such case made and provided, C.R.S (1) (b) and (1), (Securities Fraud Class 3 Felony), against the peace and dignity of The People of the State of Colorado. COUNT SIX (Securities Fraud, Course of Business F3) On and between January 18, 2006, and September 5, 2008, in and triable in the State of Colorado, Hamilton Alan Bird in connection with the offer or sale of any security to investors in EquityFX, directly or indirectly, unlawfully, feloniously, and knowingly engaged in any course of business which operated or would operate as a fraud or deceit upon any person, contrary to the form of the statutes in such case made and provided, C.R.S (1) (c) and (1),, and against the peace and dignity of The People of the State of Colorado, and as more fully set out below: 1. BIRD solicited investors to invest in fraudulent foreign exchange currency trading activity. BIRD never told investors of any risks associated with the investments. The investments are past due, and remain, in whole or in part, unpaid. 2. In connection with the fraudulent sale of these securities, BIRD conducted business from his residence, located in the county of El Paso, Colorado. In furtherance of the commission of this offense, BIRD opened EquityFX, Inc. BIRD had investors provide funds to him, through this business, and deposit the funds, directly through wire transfer, or otherwise, into BIRD S EquityFX accounts. 3. The investments BIRD solicited directly or indirectly, in connection with this count, on and between January 18, 2006, and September 5, 2008, include one or more of the following: Allen Pedersen, of Colorado Springs, Colorado, invested approximately sixty three thousand dollars ($63,000) in approximately three transactions, about and between April 12, 2007, and May 2, Michael and Cynthia Edwards, of Colorado Springs, Colorado, invested approximately two thousand five hundred dollars ($2,500) on and about January 19, 2006.

7 Shauna Chanda, of Monument, Colorado, invested approximately two thousand one hundred dollars ($2,100) on or about January 18, Henry Hinn, of San Juan Capistrano, California, invested approximately seventy five thousand dollars ($75,000) in three transactions about and between February 24, 2006, and April 26, Martha Hund of Greeley, Colorado, invested approximately one hundred ninety thousand dollars ($190,000) in five transactions about and between December 1, 2006 and July 18, Nathan Nitchals, of Oklahoma City, Oklahoma, invested approximately five thousand dollars ($5,000) on or about April 26, Barbara Day, of Phoenix, Arizona, individually, and on behalf of Marcella Pante of Ecuador, and Annie Warren, of the United Kingdom, invested approximately thirty five thousand thirty five dollars ($35,035) in three transactions, about and between July 1, 2007, and August 24, Jon Randolph and Kelly Bohren, of Rockford, Illinois, invested approximately five thousand dollars ($5,000) on or about November 29, Kathy Daub, of Rockford, Illinois invested approximately ten thousand dollars ($10,000) on or about December 12, Patrick Gambill, of Euless, Texas invested approximately ten thousand dollars ($10,000) on or about March 19, Ron Richerson, of Colorado Springs, Colorado, invested approximately forty thousand dollars ($40,000) in approximately three transactions, about and between May 8, 2006 and June 30, Richard Rushton of Fairfield, New Jersey, invested approximately one hundred seventy five thousand dollars ($175,000) in three transactions about and between July 16, 2008, and September 5, 2008.

8 4. BIRD failed to disclose to investors that he suffered any trading losses in EquityFX. BIRD continued to conceal from investors that he had been involved in previous civil and criminal litigation for past business conduct resulting in criminal convictions and civil judgments. BIRD did not disclose to investors that he had civil and criminal proceedings pending against him during the time he accepted investments in EquityFX, and failed to inform investors of litigation, both criminal and civil, after accepting the investments. BIRD failed to disclose the actual risks of the investments. BIRD concealed his true identity, and maintained a false identity to some investors throughout the entire course of business. In addition, BIRD concealed the actual use and value of investor funds throughout the operation of the business. 5. In connection with the sale of these securities to EquityFX investors, BIRD engaged in an act, practice and course of business which operated or would operate as a fraud and deceit upon the investors in EquityFX, as described in the narrative of Essential Facts, and the preceding paragraphs, which are hereby incorporated by reference. COUNT SEVEN (Theft over $15,000 F3) About and between January 18, 2006, and September 5, 2008, in and triable in the State of Colorado, Hamilton Alan Bird, through EquityFX, did unlawfully, feloniously and knowingly obtain or exercise control over a thing of value, to wit: MONEY, which was the property of investors in EquityFX, by deception, and did knowingly use, conceal and abandon the money in such manner as to deprive the investors in EquityFX permanently of its use and benefit, and the value of said MONEY was more than fifteen thousand dollars contrary to the form of the statute in such case made and provided, C.R.S (1)(b) and (2)(d), (Class 3 Felony) and against the peace and dignity of the People of the State of Colorado, and as more fully set forth above in the Narrative of Essential Facts, and Count Six, which are incorporated herein by this reference.

9 AS TO COUNT ONE AS TO COUNT TWO AS TO COUNT THREE AS TO COUNT FOUR AS TO COUNT FIVE AS TO COUNT SIX AS TO COUNT SEVEN

10 I,, the Foreperson of the (PRINT) State Grand Jury, do hereby swear or affirm that each and every True Bill returned in the Indictment by the State Grand Jury was arrived at after deliberation and with the assent and agreement to the existence of probable cause by at least nine members of the State Grand Jury. The State Grand Jury further authorizes and instructs the Colorado Attorney General to return this Indictment to open court with or without the presence of the foreperson. FOREPERSON S SIGNATURE Subscribed and sworn to before me in the City and County of Denver, State of Colorado, this day of, NOTARY PUBLIC S E A L ADDRESS My commission expires:

11 JOHN W. SUTHERS ATTORNEY GENERAL Michael J. Bellipanni, Reg. No Assistant Attorney General The State Grand Jury presents the within Indictment, and the same is hereby Ordered filed this day of, Pursuant to C.R.S , the Court hereby designates the County of, Colorado, as the county of venue for the purposes of trial. LARRY NAVES CHIEF JUDGE SECOND JUDICIAL DISTRICT