Bixby Associate’s Guilty Plea Implicates Co. Officer
A former acting chief financial officer of Ramsey-based Bixby Energy Systems, Inc., pleaded guilty on Wednesday to one count of securities fraud, Minnesota's U.S. attorney's office announced.
And in his plea agreement, Dennis DeSender reportedly implicated an unidentified former officer of the company in the $60 million securities fraud scheme, through which he fraudulently solicited investors to fund a venture to sell coal-gasification technology to China.
A handful of Bixby leaders, including CEO Robert Walker, who have come under fire for allegedly mismanaging the company resigned in May in order to settle two civil lawsuits.
DeSender, 64, said in his plea agreement that from January 2010 to May 2011, while acting as a consultant for Bixby, he was responsible for raising funds for the company's projects, including a coal-gasification energy system, according to the U.S. attorney's office.
DeSender admitted that he and others fraudulently induced investors to provide money to the company, and he also solicited unqualified investors to buy Bixby securities. He also told investors that the coal-gasification project was ready for market, when it actually wasn't.
Some of the investors' funds were used by Bixby, while a significant portion went toward salaries and commissions paid to DeSender and others at the company. He admitted to being responsible for about $4.3 million in losses to investors, the U.S. attorney's office said.
DeSender faces up to 20 years in prison-and a report by the Star Tribune indicates that more indictments in the case are likely to come.
In his plea deal, DeSender implicated “Individual A”-who was identified in court documents as a Bixby officer-as being involved in the fraud scheme, the Minneapolis newspaper reported.
An assistant U.S. attorney declined to disclose the name of “Individual A” but told the Star Tribune that the person had been an officer of the company during the alleged securities fraud and is no longer there.
The plea deal also said the former officer used investors' money to put family members on the payroll-an allegation Walker had faced in civil litigation, the Star Tribune reported.
Walker's attorney, meanwhile, told the Minneapolis newspaper that DeSender would say or do anything to save himself from a long prison sentence, and he pointed out that Walker hasn't been indicted.
Read the full Star Tribune story here.