Early today in federal court, the founder of Bixby Energy Systems, Inc., a Ramsey-based alternative energy company, was indicted for lying to investors in an effort to induce them to commit large sums of money to the business. Robert Allen Walker, age 69, of Ramsey, Minnesota, was charged in a superseding indictment with nine counts of mail fraud, five counts of wire fraud, four counts of securities fraud, and one count of conspiracy to commit mail fraud. These charges were added to Walker’s prior charge of one count of conspiracy to commit securities fraud. That charge was filed against him by way of indictment on December 20, 2011.
From 2001 to 2011, Walker was the president, chief executive officer, and
chairman of the board at Bixby Energy. In that capacity, he allegedly raised
more than $43 million from at least 1,800 investors by offering company
securities based on false or misleading information about 1) the payment of
salaries and commissions to Bixby officers and directors; 2) the operational
capability of Bixby’s core product, a coal gasification machine; and 3) the
prospect of conducting an initial public stock offering. Walker also allegedly
concealed from investors that new investor money was being used to make payments
to existing investors and was being diverted to fund Walker’s lavish
To further his fraud, Walker purportedly told investors that Bixby officers
and directors would not be compensated for selling company securities but then
directed payments of at least $3 million to a company officer for doing just
that. From those payments, the officer then reportedly kicked back more than
$600,000 to Walker. This “commission sharing” arrangement was not only concealed
from investors but from the company’s board of directors. Walker also made
repeated misstatements regarding the capability of the company’s coal
gasification machine, characterizing it as “proven” and “ready for market,”
when, in fact, the technology had never worked, and the machine had substantial
defects. Moreover, the indictment alleges that Walker told investors the company
was going to conduct an initial public offering of its stock in the near future,
when, in truth, he knew it could not be done because, among other things, the
company could not obtain audited financial statements.
On February 28, 2012, Gary Albert Collyard pleaded guilty to conspiring to
mislead investors in an effort to induce them into committing large sums of
money to Bixby. Specifically, he pleaded guilty to one count of conspiracy to
commit securities fraud and one count of conspiracy to commit bank fraud. From
2006 through May 2011, Collyard was a broker or finder of investors for Bixby
and was responsible for raising funds for Bixby.
In December 2011, Bixby Energy Systems admitted defrauding investors of
between $2.5 and $7 million and took responsibility for the acts of its former
officers and agents. In September 2011, Dennis Luverne Desender, who was a
consultant and the former acting chief financial officer for Bixby Energy,
pleaded guilty to securities fraud, admitting he used manipulative and deceptive
practices in an effort to sell company securities.
If convicted, Walker faces a potential maximum penalty of 20 years in prison
on each charge, except for the conspiracy to commit securities fraud count,
which has a potential maximum penalty of five years. All sentences will be
determined by a federal district court judge. This case is the result of an
investigation by the U.S. Postal Inspection Service, the Federal Bureau of
Investigation, and the Internal Revenue Service-Criminal Investigation Division.
It is being prosecuted by Assistant U.S. Attorney Christian S. Wilton.
An indictment is a determination by a grand jury that there is probable cause
to believe that offenses have been committed by a defendant. A defendant, of
course, is presumed innocent until he or she pleads guilty or is proven guilty
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