Gary Collyard

None Given, Dml -

Bixby fraudster seeks to avoid prison

  • Article by: DAN BROWNING
  • Star Tribune
  • May 18, 2012 - 9:36 PM

Gary Collyard personally bilked investors out of more than $3 million in the sale of Bixby Energy Systems stock, defrauded several banks on $1.3 million in business loans and left a trail of court judgments for about $4.2 million in bad debts.

Even so, his "good character and personal history" are reasons the 62-year-old Delano man shouldn't have to go prison on the fraud charges for which he pleaded guilty, his attorney says.

A motion filed Friday in St. Paul seeks home detention, probation and community service for Collyard rather than the recommended federal prison term of 78 to 97 months when he comes up for sentencing before U.S. District Judge Susan Richard Nelson.

"Mr. Collyard intends to pursue establishing an organization for metro children that emphasizes business and entrepreneurial ethics," attorney Thomas Brever wrote.

The motion argues that he was not a central player in the Bixby securities fraud, which resulted in investor losses of $43 million. It ascribes his bank frauds to a simple "misstatement" of his net worth on several loan applications. It notes his substantial cooperation with authorities on "multiple federal criminal investigations."

And it cites Collyard's long marriage to Valerie Lennon-Collyard, which ended as a result of his crimes, and his ongoing financial responsibilities to her and their two adult children.

Assistant U.S. Attorney Chris Wilton has not yet responded to the motion, but Bixby investor John O'Donnell did.

"You do the crime, you do the time!" O'Donnell wrote Friday in an e-mail to the Star Tribune. "This motion does not demonstrate taking responsibility and showing remorse for the numerous felony convictions!"

The portrayal of Collyard as a devoted husband galls Donald Westrum II, 51, of Maplewood. He alleges that Collyard had a 25-year relationship with his sister, Penni Westrum, 50, of Wayzata. Collyard's Cadillac Escalade has been photographed as recently as this week at her home on Lake Minnetonka, he said.

"They've been dating for years," Westrum said. "He told my sister he played hockey for the St. Louis Blues. She still thinks so. Bobby Collyard, in Hibbing, played for the St. Louis Blues. Gary never did. This guy's just a piece of work!"

Penni Westrum did not respond to messages left at her home and business, Key Cadillac in Edina.

The Westrums' mother, Beverly Ann Morris, died two years ago without leaving a will. The siblings are fighting in court over her estate, which includes the lakefront home in Wayzata and a condominium in Naples, Fla. Donald Westrum asked for the appointment of a special administrator out of concern that Collyard may be trying to gain control over the estate's assets. He said his sister has refused to turn over his mother's bank and tax records.

Collyard declined an interview but issued a brief statement. "I am a longtime friend of Penni Westrum and was also a friend of her deceased mother. I do not live with Penni Westrum. I categorically deny any suggestion of fraud in connection with my dealings with Penni Westrum or with her deceased mother," he said.

Donald Westrum says his mother told him that she had invested $250,000 a number of years ago through Collyard on an unregistered initial public offering that was supposed to make $5 million, but never did.

After her death, Westrum said he learned that taxes weren't being paid on the Florida condominium, which Morris had inherited from her parents. His sister's attorney turned over a 2002 contract for deed in which Collyard purports to be paying $100 a month to buy the property for $319,000. The condo was worth well over $600,000 in 2002, Westrum said. He said the deed was never recorded.

Collyard also proposed buying Morris' home on Lake Minnetonka from the estate about a year ago, with an offer to sell it to Westrum on a contract for deed, Westrum said.

"I said, 'Are you out of your mind?' I still remember Gary saying, 'This is what you need to do. Listen to me, I am an attorney.'"

According to court records and former employees, Collyard has acted as a real estate broker without a license, has misrepresented himself as a lawyer and has sold securities without a license for various ventures around the Twin Cities. He also has been convicted twice on tax charges.

Collyard's sentencing has not yet been scheduled.

Dan Browning • 612-673-4493

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