Key witness admits he owned two Rolls Royces and took friends on exotic vacations while raising money for failed energy company.
A top fundraiser for Bixby Energy Systems admitted in court Monday that he once owned two Rolls-Royce automobiles and spent lavishly on his wardrobe and on travel to Bali, Paris and other places, often with friends whose tab he picked up.
Dennis Desender, who helped raise more than $50 million for the failed Ramsey company, said he once “lived large.” The admission came while being questioned by an attorney for Robert Walker, former Bixby CEO. Walker is on trial, accused of cheating investors to enrich himself and others.
It was the fourth day of testimony for Desender, a government witness with a record of business fraud who hopes to reduce his 8-year sentence for securities and tax crimes in the Bixby case by testifying against his former boss.
“I would like to get out and enjoy the rest of my life,” said Desender, 66, in U.S. District Court in St. Paul.
Walker, 71, who founded bedmaker Select Comfort but left the company to co-found Bixby in 2001, is on trial on fraud, conspiracy, tax evasion and witness tampering charges. Prosecutors allege that 1,800 investors lost $57 million over a 10-year period when Walker, Desender and others pitched shares in the start-up energy company.
While raising money and collecting 10 percent commissions on stock sales, Desender admitted traveling around the world, staying in posh hotels and eating in the best restaurants.
Desender said under cross-examination by defense attorney Peter Wold that Walker knew of his late-1990s convictions for bank fraud and embezzlement before hiring him in 2001.
Wold also extracted a new disclosure about Desender’s financial misdeeds. Desender admitted that after his father died, he continued to make charges on his father’s American Express account.
During the cross-examination, Wold pressed the defense’s case that Walker was a naive businessman who had high hopes for his energy business. The company initially produced corn-burning stoves, then shifted to clean-coal technology.
At times, and depending on who asked the question, Desender seemed to help the defense. When asked by Wold about Bixby’s chances of developing coal-gasification technology after 2007, Desender responded: “We thought that we had a product that potentially could go to the stratosphere.”
That seemed to buttress the defense’s contention that Walker was a dreamer and an entrepreneur who believed in Bixby’s technology — only to be let down by others, including engineers who were being paid to develop the clean-coal technology, and who ultimately failed.
But later, under renewed questioning by Assistant U.S. Attorney David MacLaughlin, Desender offered a different take. He said the clean-coal technology never worked.
“We were telling people this was working, and it wasn’t,” he said.
Desender will return to the witness stand Tuesday. The trial is in its fourth week and is expected to last at least two more weeks.
David Shaffer • 612-673-7090 Twitter: @ShafferStrib