Ex-Bixby CEO lied to investors, prosecutors conclude. His attorney says Walker is “not a criminal.”
The marathon fraud trial of Robert Walker, whose promotion of green energy in a Minnesota company that attracted $57 million in investments but never made money, is now in jurors’ hands.
After seven weeks of testimony ended Monday with more than four hours of closing arguments, the 12-person jury began its work to decide Walker’s fate on 17 criminal counts of fraud, conspiracy, tax evasion and witness tampering.
At issue is whether coal gasification technology promoted by Walker and the company he led, Bixby Energy Systems, was economically viable or whether investors were lured into a long-shot project through misrepresentations and deceptions.
In his summation to jurors, Assistant U.S. Attorney Benjamin Langner said Walker “lied to investors” as the Ramsey-based company struggled to develop the alternative fuel process. He accused Walker of steering company funds for the enrichment of himself, family members and so-called company accomplices while also taking steps to prevent shareholders from finding out.
“He deceived people in order to take their money,” Langner said in federal court in St. Paul.
“Mr. Walker was CEO of the company. It wasn’t his money. He had a fiduciary responsibility to use it responsibly. He spent money as if it was his own.”
Walker’s attorney, Peter Wold, told the jury that the businessman made mistakes, none of which were criminal.
“Never, in anything he said to an investor, did he intend to steal their money,” Wold said. “He wanted everyone to win. What he did wasn’t a crime. He made mistakes and he knows that, but he was not a criminal. Bob Walker is a creator, a dreamer. He imagines things. He dedicates himself to making those dreams come true.”
Years after becoming known as the inventor of the Sleep Number bed and founder of Select Comfort Corp., Walker led Bixby from 2001 to 2011 as it was trying to develop and commercialize a technique for converting coal to gas. During the trial, some witnesses for Walker testified that the idea held promise. But others questioned Walker’s ability to lead a company, even citing problems at Select Comfort before he left that firm in the early 1990s.
Walker, 71, testified in his own defense last week, saying that he took loans from the company, not kickbacks, as the government alleged. He said that he shut down internal audits that might have shown more detail about funds because they were costly to the company and might have led directors to close Bixby.
“I sincerely believed that the shareholders made their investments partly because of me and not the board,” Walker testified. “I was responding to them.”
In his closing argument, prosecutor Langner criticized Wagner’s representations that, once Bixby became a public company, all of the shareholders would be wealthy.
He also questioned Walker’s reliance on Dennis Desender, a convicted embezzler, as point man to secure investors.
“Why would you employ someone like that?” Langner asked. “You’d employ someone like that because Dennis Desender is going to lie to people with a straight face. Mr. Walker knew what he was getting from Dennis Desender.”
The government alleged that Walker and Desender had a secret agreement to split commissions paid to Desender for investors he landed. Those payments to Walker, which the government calls kickbacks but Walker insisted were loans, totaled $690,000.
Wold said Walker believed in the coal-to-gas technology so strongly that he continued to search for new investors even as Bixby was collapsing around him and as prospective sales in China, critical to Bixby’s survival, were at risk.
But the technology failed on a commercial level and additional funding could not be secured before Walker left the company in a boardroom dispute in 2011.