Ian Bell, a Denver day trader who used phony screenshots and fake email addresses to bilk 30 investors out of $1.2 million, was sentenced to 37 months in a federal prison Friday.
“I deeply regret the choices that led me here and the harm that I caused,” Bell told U.S. District Judge Philip Brimmer before pausing to apologize to his family and to briefly cry.
“To those who placed their confidence in me, I offer my sincere apologies,” he added.
Brimmer also ordered Bell to repay $1.2 million and to spend three years on probation.
“This kind of thing has a terrible effect on the victims. I don’t know how Mr. Bell could live with himself during this scheme,” the judge said just before handing down the sentence.
“Maybe they should not have been duped by the preposterous stories that Mr. Bell told. In retrospect, that all sounds crazy. But it was Mr. Bell who made them believe.”
Bell, 36, was indicted in December on 18 felony counts of fraud and money laundering. In May he pleaded guilty to one count of wire fraud and one count of money laundering.
Bell passed his investment adviser exam in 2017 and worked as an adviser representative off and on until 2019, including as an independent contractor at the Boulder investment firm Black Swift Group. In 2020, he began investing the funds of his Denver social clique.
“To obtain money from investors, Bell touted his investing skills and told many investors he could earn significant returns with low risk,” according to his plea deal. “In nearly all cases, however, he spent or lost the investors’ money within days or weeks of receiving it.”
Bell admits lying to investors about how their accounts were doing, including sending screenshots of fabricated gains to solicit greater investments. When investors demanded refunds, he used fake emails to claim trading platforms wouldn’t release the cash.
“He used other people’s money because he knew from experience that he was incredibly bad at investing,” Brimmer said of Bell, who had lost money in the market before the scheme.
Investors gave Bell $1.5 million. After some refunds, their total losses were $1.2 million.
Prosecutors say it is difficult to determine how much of that money Bell pocketed and how much he lost in the market but estimate he kept between $180,000 and $275,000. They claim the money financed a “lavish” lifestyle, including a wedding in Mexico and other vacations.
“Bell, who came from a privileged background, engaged in this conduct not out of need but instead out of greed and lust for an extravagant lifestyle,” they wrote in a court filing.
Bell’s attorney objected to the government’s use of “lavish.” Since Bell’s mother bought the wedding ring Bell gave to his wife and his in-laws paid for their wedding, no investor cash was used. Instead, ill-gotten gains largely went to ordinary, unlavish living expenses.
“This case falls outside the heartland of most fraud cases that you see,” Bell’s lawyer, Harvey Steinberg of Springer & Steinberg, told Brimmer on Friday, arguing that his client “sought to make money” for the investors who trusted him: “Not steal money, make money.”
“Ultimately, we are here because he lost the money. If his trades had been successful, we would not be here,” Steinberg said, causing the judge to interject with a question.
“Doesn’t he seem to be treating this money that he gets from investors as free money?”
“If it was free money he would have put it in his pocket,” Steinberg replied. “He didn’t put it in his pocket. He continued to invest with the hope, the prayer, that the money would be made back.”
Bell’s finances were relevant to the debate over whether he should pay a fine in addition to the $1.2 million in restitution he has agreed to pay. Unemployed and with a child on the way, Bell has no means to pay a $150,000 penalty on top of the restitution, his lawyer pleaded.
Prosecutors, on the other hand, say Bell drives cars paid for by his wife and mother, lives for free in a house his wife bought, and receives unemployment checks. A fine was needed to deter Bell and others “who commit fraud to satiate their own greed,” they said.
“There is not a shred of evidence that he ever meant to make money for his victims,” Assistant U.S. Attorney Brad Giles said Friday, arguing that Bell would have pocketed proceeds from his trades or spent them on cocaine, which he was using to fuel all-night trading binges.
Brimmer agreed that a deterrent was needed and fined Bell the $150,000.
“There is no suggestion that Mr. Bell was ever trying to do well by his clients. Ever! He was just playing with their money because it was free money, hoping he would hit the jackpot.”
Bell’s 37-month prison sentence is what both the prosecution and defense asked for under the terms of his plea agreement. Bell will report to prison at a later date. He left the courthouse Friday with two dozen family members and friends, who packed the defense side of Brimmer’s courtroom. The judge said he also received 40 letters of support for Bell.
“The government talks about the defendant coming from a successful family, a privileged background,” Steinberg said. “I’m not here to deny that but there are counterpressures that come with that. His father was well known in financial circles, was very successful.”
In an interview after Friday’s hearing, Amanda Prestegard, the special agent in charge of the IRS’ criminal investigation office in Denver, applauded Bell’s “strong sentence.”
“The restitution will be on the books and hanging over him until he pays it back. I hope that this really does send a message that we are watching and we are doing what we can to fight for these victims. They deserved a sentence like this,” she said.
“The reason that we got wind of this case and were able to pursue it is because the victims were so persistent in saying, ‘We need justice, we need our money back.’ It pushed (Bell) to tell even more lies, which frankly created even more evidence of his crimes,” she added.
Prosecutors say Bell’s victims include professional athletes but have not named any. Court documents in a separate case show that his largest victim was Ryan Lewis, who played in the NFL for four years and now coaches at the Colorado School of Mines. Lewis, who reportedly lost $286,500 between 2021 and 2022, is suing Bell for fraud in Denver District Court.
“He was someone I trusted, believed in and supported,” Lewis testified at Friday’s hearing.
“I thought I was dealing with someone who was honest. But behind that was a pattern of deception,” Lewis told Brimmer, describing how Bell’s fraud left him questioning his own integrity and intelligence. “This is truly a nightmare that I live with every day.”
Robert McWhorter, the other victim to testify at the sentencing, said Bell described his investment as “foolproof,” then lost his $63,000. McWhorter and his wife had saved that money for construction of a retirement home. Instead, they have been forced to sell their land.
“There probably isn’t a day that goes by that I don’t think of his name, and those thoughts are not very favorable,” McWhorter said of Bell. “They’re not even something I’d like to repeat here in court. So, if there is any way to get restitution out of this crook, I’d appreciate it.”