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Saturday
Jan052013

Former Colorado Sheriff Accused of Duping Co-Workers in $1.2 Million Ponzi Scheme

A former Colorado sheriff's deputy is accused of deceiving co-workers and other law enforcement officials in a Ponzi scheme that promised annual returns of over 100%.  David Hawkins, a former El Paso County Sheriff deputy who then operated an indoor-football league, entered an initial plea of not guilty to charges of wire fraud and spending of unlawfully-obtained funds.  Wire fraud carries a maximum prison term of twenty years and a $250,000 fine, while the charge of spending money illegally carries a ten-year maximum sentence and a $250,000 fine.  

Hawkins was hired by the El Paso Sheriff's Office in 2001, where he was sworn in as a sheriff's deputy in 2002.  He remained in that position until his resignation in December 2011.  However, beginning in late 2009, Hawkins began soliciting investments in his PD Hawk Investments Fund - apparently without receiving written approval for outside employment as required by his employer.  Hawkins touted himself as a currency trader, and boasted that he had three years of experience in obtaining consistent and steady profits as high as 62%.  Hawkins' investors included fellow sheriff's deputies and law enforcement officers, who were promised monthly returns of 10% with the understanding that Hawkins would keep any amount over that threshold.  In total, Hawkins is said to have raised over $1 million.

Hawkins also was heavily involved in an indoor football league, announcing his plans at a July 2011 news conference that his Danville Dragons would start a 14-game season beginning in March 2012.  However, when these plans were abruptly cancelled several months later, authorities began an investigation that revealed Hawkins was apparently not the astute currency trader he held himself out to be.  Instead, according to authorities, Hawkins never earned any profits from his trading.  Instead, he used investor funds to run the classic Ponzi scheme - making fictitious interest payments and for a variety of personal expenses, including spending more than $18,000 at an Oregon automobile dealership.  

The Colorado-Springs Gazette reports that Hawkins has retained a high-powered defense attorney and is currently negotiating a plea agreement.  

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