Former CFO At Bixby Energy Sentenced For Securities Fraud And Tax Evasion
MINNEAPOLIS – Earlier today in federal court in St. Paul, the former acting chief
financial officer for Bixby Energy Systems, Inc., was sentenced for lying to investors to get them
to commit large sums of money to the business and for failing to file federal tax returns and
reporting his income for three years, which resulted in a tax loss for the Internal Revenue Service
United States District Court Judge Susan Richard Nelson sentenced Dennis Luverne
Desender, age 65, to 97 months on one count of securities fraud and one count of tax evasion. On
September 14, 2011, Desender was charged and pleaded guilty to securities fraud. On February
23, 2011, he was charged and pleaded guilty to tax evasion.
In his plea agreement, Desender admitted that from January of 2010 through May of 2011,
he and others used manipulative and deceptive practices in an effort to sell securities. During that
time, Desender was a consultant for Bixby Energy but had previously been the company’s chief
financial officer, in charge of raising funds for Bixby projects, including a coal gasification
energy system. Desender also admitted soliciting unqualified investors to invest in the company.
In exchange for investment funds, investors were sold Bixby securities.
While some investment money was used by Bixby, Desender spent a significant portion of
the funds on salaries and commissions for himself and others. Desender routinely provided false
information to investors to induce them into remaining financially involved with Bixby and to
potential investors to entice them into initiating investments. Among other things, Desender
concealed information regarding the coal gasification project, telling investors and potential
investors that it was ready for market, when, in fact, it was not. Desender was responsible for
approximately $4.3 million in investor losses.
Desender also admitted that he failed to file tax returns for tax years 2005 to 2008. In
addition, he admitted that on October 17, 2005, he filed a false Form 1040 tax return for the tax
year 2004, failing to report gross receipts of $31,878 and falsifying $314,885 in business
deductions relative to his Blooming Prairie, Minnesota, financial consulting business.
As a result of the criminal investigation against him, Desender already has filed the
appropriate tax returns and intends to file an amended 2004 return.
On June 19, 2012, the founder of Bixby Energy, Robert Walker, was charged in a
superseding indictment for lying to investors in an effort to induce them to commit large sums of
money to the business. On February 28, 2012, Gary Albert Collyard pleaded guilty to conspiring
to mislead investors into committing large sums of money to Bixby. In December of 2011,
BixbyEnergy Systems admitted defrauding investors of between $2.5 and $7 million and took
responsibility for the acts of its former officers and agents.
These cases were the result of an investigation by the Internal Revenue Service-Criminal
Investigation Division, the U.S. Postal Inspection Service and the Federal Bureau of
Investigation. They were prosecuted by Assistant U.S. Attorney Christian S. Wilton.