Colorado Man Pleads Guilty to $1.7 Million Ponzi Scheme

A Colorado man has pled guilty to defrauding at least 79 investors as part of a Ponzi scheme that netted at least $1.7 million.  Frederick H.K. Baker, 46, pled guilty Tuesday to one count of wire fraud and one count of conspiracy to commit wire fraud in connection with a purported sophisticated currency trading operation that was ultimately revealed to be a Ponzi scheme.

Baker admitted that he began soliciting investors in 2006 and 2007 from Colorado and several other states.  Promising investors a monthly return of at least 8 percent, Baker also guaranteed investors that the principal would remain safe.  Yet, instead of using actual profits, Baker used funds from incoming investors to pay older investors.  Prosecutors alleged that investor funds were used to pay for off-road vehicles, a down payment on a Durango, CO house, and work done on personal automobiles.  

As part of Baker's sentence, he was also ordered to pay $820,000 in restitution to the victims defrauded by the scheme.  He is currently scheduled to be sentenced on October 7th in a Denver federal court. Under current federal sentencing guidelines, Baker faces a sentence between 41 and 51 months in prison.  Another individual charged in the scheme, Mark Akins, is still awaiting trial after pleading not guilty earlier this year.