Former Bixby CEO Pleads Not Guilty to Fraud Charges
Bob Walker on Thursday pleaded not guilty to the 20 federal charges he faces, which stem from allegations that he and others defrauded investors in Bixby Energy Systems, Inc., a Ramsey-based start-up that he founded.
Walker, who is perhaps best known as the founder of Minneapolis-based Select Comfort and invented its Sleep Number bed, was arrested in December and indicted on one count of conspiracy to commit securities fraud for his alleged role in defrauding investors. On June 19, prosecutors filed a superseding indictment that added 19 new charges—including nine counts of mail fraud, five counts of wire fraud, four counts of securities fraud, and one count of conspiracy to commit mail fraud.
Walker entered his not guilty plea on Thursday before U.S. Magistrate Judge Jeanne Graham in U.S. District Court in St. Paul, according to court documents.
Walker’s plea was expected: His attorney, Peter Wold, told Twin Cities Business last month that Walker would plead not guilty to all charges, adding that he’s “not interested in admitting to anything he didn’t do.”
From 2001 through 2011, Walker served as president, CEO, and chairman of Bixby, which focuses on the development of alternative energy projects, including a “coal gasification” venture designed to convert coal into clean-burning natural gas.
Prosecutors say he helped raise more than $43 million from at least 1,800 investors by offering company securities based on false or misleading information; for example, he is accused of lying about compensation of company officers and also about the capability of Bixby’s coal gasification machine. Walker also misled investors by saying his company would conduct an initial public offering but knew it couldn’t, in part because the company was unable to obtain audited financial statements, according to the indictment.
A number of other charges have been filed pertaining to the fraud. Dennis Desender, a consultant and the former acting chief financial officer for Bixby, pleaded guilty in September to securities fraud.
In December, Bixby admitted that it defrauded investors of between $2.5 million and $7 million and struck a deal with the U.S. Attorney’s Office, through which the company accepted responsibility for the actions of its former workers and agreed to assist the government in its investigation—in exchange for not being prosecuted.
Then in February, Gary Collyard—a broker who raised funds for Bixby—pleaded guilty to one count of conspiracy to commit securities fraud and one count of conspiracy to commit bank fraud, according to the U.S. Attorney’s Office.