DENVER – Colorado Attorney General John W. Suthers today announced the conviction of Douglas Alan Scott (DOB 11/16/59), of Colorado Springs, for his role in an investment scam involving more than 400 Colorado investors and more than $12 million in misappropriated funds. Scott was convicted by a Colorado Springs jury after three-and-a-half hours of deliberation on felony counts of securities fraud and theft. He faces a maximum sentence of 24 years in prison.
Scott, a former evangelical pastor, served in 2003 and 2004 as a customer service representative for The Vision Fund, which was an unlicensed hedge fund based in Colorado Springs. Scott didn’t make required disclosures to potential investors in regard to the amount he was to be paid. Scott was given $780,000 in referral fees, despite not being licensed as a securities broker in the state. The Vision Fund also assumed a debt of $3.5 million for the purchase of a private plane, using investor funds.
Scott’s business associates in XL Capital Partners – the general partner over The Vision Fund – were H. Alan Bird and David Edward Newton. Newton is currently serving probation for his role in the scam, while Bird is awaiting his March 31 trial date.
The case came to the attention of the Attorney General thorough the Colorado Division of Securities. In December of 2004, the Division and The Vision Fund agreed to a receivership, which returned approximately forty-cents-on-the-dollar to investors. All told, more than $12 million was lost. Earlier this year, Scott agreed to repay $850,000 in a separate legal judgment.