Founder Of Bixby Energy Systems Sentenced To 25 Years In Prison For Stealing More Than $56 Million From Investors
Minneapolis – ROBERT ALLEN WALKER, 72, of Ramsey, Minnesota, was sentenced on September 25, 2014, to 25 years in federal prison for stealing more than $56 million from hundreds of investors. On March 5, 2014, after an 8-week trial, WALKER was found guilty of four counts of Mail Fraud, nine counts of Wire Fraud, one count of Witness Tampering and three counts of Tax Evasion.
From 2001 to 2011, WALKER was the president, chief executive officer, and chairman of the board at Bixby Energy. In that capacity, he raised more than $43 million from at least 1,800 investors by offering company securities based on false and 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 used investor money fund his and his family’s lavish lifestyles.
As part of the scheme, WALKER 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 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 lied repeatedly about 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, throughout the company’s existence, WALKER told investors that Bixby 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 legitimate audited financial statements, and the company’s coal gasification machine was incapable of delivering results consistent with WALKER’s outlandish promises.
As part of his sentence, WALKER was ordered to pay over $56 million in restitution.
Assistant U.S. Attorneys David J. MacLaughlin and Benjamin F. Langner prosecuted this case.
This case was the result of an investigation conducted by U.S. Postal Inspection Service, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation Division.
ROBERT ALLEN WALKER, 72
• Mail Fraud, 4 counts
• Wire Fraud, 9 counts
• Witness Tampering, 1 count
• Tax Evasion, 3 counts
• 25 years in federal prison
• 3 years supervised release