“If it sounds too good to be true it probably is. People should diligently check out claims of unusually high rates of return before investing. Don’t become a victim of an investment scam,”
- Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office.
A former Denver sheriff's deputy agreed to plead guilty to charges that he operated a Ponzi scheme promising 100% annual returns to fellow law enforcement officers and their families. David Hawkins, a former El Paso County deputy sheriff, entered into a plea agreement with prosecutors in which he pled guilty to one count of wire fraud and one count of money laundering. Wire fraud carries a maximum sentence of twenty years in prison, while money laundering carries a maximum ten-year term. Hawkins could also face criminal fines, and will likely be required to pay restitution to his victims.
Hawkins was hired by the El Paso Sheriff's Office in 2001, and soon thereafter was sworn in as a sheriff's deputy. In or around 2006, Hawkins began attending training courses on how to trade foreign currencies ("forex") in 2006. Using this knowledge, he began to hold himself out as a sophisticated currency trader, telling colleagues, family, and friends that he had several years of experience in achieving consistent gains - sometimes as high as 62% - from forex trading. Unbeknownst to his employer, Hawkins told potential investors that an investment in his PD Hawk Investment Fund would yield consistent 10% monthly returns - an annual return of over 100%. Based on these representations, Hawkins raised more than $1 million from over 70 investors.
However, according to the FBI, "at no time were [Hawkins'] investments ever profitable." Instead, Hawkins ran the classic Ponzi scheme, using investor funds to repay earlier investors and to make purported interest payments. Hawkins used investor funds as his personal piggy bank, purchasing multiple automobiles, paying personal expenses, and even buying two semi-professional indoor football franchises in Illinois and Texas. These teams never became operational, and authorities began investigating after Hawkins abruptly cancelled the 2012 season. Authorities estimate that total losses to investors exceeded $200,000.
Hawkins is scheduled to be sentenced on June 7, 2013, at 11:00 a.m.