Founder of Bixby Energy Systems indicted for defrauding investors
FOR IMMEDIATE RELEASE
December 21, 2011
MINNEAPOLIS—Earlier 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 specifically charged with one count of conspiracy to commit
securities fraud. He was arrested earlier today and made his initial appearance in St. Paul this
The indictment alleges that 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 approximately 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 diverted to fund Walker’s lavish lifestyle.
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 and
liquefaction technology and machine, characterizing them 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.
Last week, 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 of
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 five years in prison. All
sentences will be determined by a federal district court judge. This case is the result of an
investigation by the Internal Revenue Service-Criminal Investigation Division, the United
States Postal Inspection Service, and the Federal Bureau of Investigation. 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 at trial.
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