Gary Collyard, a figure in the Bixby Energy Systems swindle, is going to prison for 10 years and must pay his victims more than $5 million in restitution.
A federal judge in St. Paul on Thursday gave the Delano businessman the maximum allowed prison sentence, saying she took his character into account.
U.S. District Judge Susan Richard Nelson said that in her career she has never before seen a criminal defendant fail to show some remorse or apologize to victims. Collyard showed “no acknowledgment of people’s pain,” she said.
“I can only hope you can take this occasion to think clearly about what matters in this world,” Nelson told him.
Collyard, dressed neatly in a dark suit, remained expressionless during the sentencing. A cluster of victims in attendance quietly cheered as he was taken into custody.
Collyard’s seemingly vast web of lies was exposed by the collapse of Bixby Energy, a Ramsey company that was developing a technology for coal gasification. The scheme cost about 1,800 investors and business partners more than $40 million, according to government estimates.
Collyard served as a “finder,” delivering potential investors to the company. At one point he admitted to responsibility for about $3 million of Bixby’s losses.
He pleaded guilty to one count of conspiracy to commit securities fraud related to the sale of Bixby stock, and one count of conspiracy to commit bank fraud related to lying to get loans from multiple lenders around the Twin Cities for his personal and business use. The St Paul native’s spendy lifestyle included expensive cars and an 8,000-square-foot home on 50 acres in Delano.
Collyard, 63, will serve more prison time than Dennis Desender, a more central player in the Bixby operation.
Desender, of Minneapolis, was sentenced last year to just over eight years in prison for committing securities fraud and tax evasion related to his dealings with Bixby. Desender served as Bixby’s CFO and was a key fundraiser. His lengthy criminal record was hidden from most investors. Among other things, Desender was convicted of bank fraud in 1998.
Victims were pleased with Collyard’s sentence.
Mike Noonan of Arden Hills, who used to work for Collyard, said he was happy.
“After five years and a very slow judicial process, justice has finally been served,” Noonan told the Star Tribune. “We have one less malicious predator on the streets.”
Noonan said he first reported Collyard to the FBI in 2008.
Leading up to the final sentencing, the judge heard sometimes-tearful testimony from victims who told of Collyard betraying them with lies about being a lawyer, a real estate broker, a securities broker, an MBA and even a hockey player.
Sylvia Kidd of Apple Valley cried as she described to the court how she dated Collyard for 15 years, believing him to be single and a lawyer when in fact he was neither. He preyed on gullible women, she told the judge.
Kidd said she withdrew her 401(k) retirement savings for him with a promise he would pay her back in 30 days but only saw the money years later after hiring a lawyer.
Collyard said little when he was asked if he wanted to address the court. “Only God knows what’s in my heart,” Collyard said.
Guilty plea disowned
Collyard had tried earlier to wrangle free of his guilty pleas by claiming bad lawyering, and then claiming he was groggy from prescription pain medication after his eye surgery. Both efforts failed.
On Thursday, Assistant U.S. Attorney David MacLaughlin argued for a stiffer sentence, saying Collyard’s costly efforts to reverse his guilty plea amounted to obstruction of justice, but the judge declined.
Collyard still faces tax evasion charges and is scheduled to be sentenced on that later this month in Hennepin County District Court.
A civil case the Securities and Exchange Commission brought against several Bixby players, including Collyard, is ongoing.
The Bixby venture, meanwhile, is comatose.
The company’s founder and CEO, Bob Walker of Anoka, faces charges of mail fraud, wire fraud and conspiracy as well as tax evasion. Walker, 70, is best known as the founder of the mattress company Select Comfort.
Walker allegedly ran Bixby as his own personal piggy bank from 2001 to 2011, while misrepresenting the coal gasification technology, cheating investors and a Chinese-owned business partner out of more than $40 million. He faces charges of mail fraud, wire fraud and conspiracy as well as tax evasion.
Walker has pleaded not guilty; his trial is scheduled for January.
Melanie Bonine, who ran Bixby’s payroll and is Walker’s daughter, according to court documents, was charged in July with filing a false tax return in 2009. Her arraignment is scheduled for later this month.