A convicted fraudster who once served as chief financial officer of Bixby Energy Systems testified Tuesday that CEO Robert Walker knew all along of his felony record and for years took kickbacks from commissions on the sale of company's now-worthless stock.
Dennis Desender, who also served as a top fundraiser for the company, said he met Walker through another man in 2001, just as Bixby was getting started in the business of making corn-burning stoves.
"He really didn't care if I had a past or not," said Desender, 66, who wore a prison-issue pullover as he testified at Walker's trial in U.S. District Court in St. Paul.
In his first day of testimony for the prosecution, Desender described Bixby as a company focused on raising money from investors while Walker and his family enriched themselves. He will be on the witness stand again Wednesday, eventually facing cross-examination by Walker's attorneys.
He is a pivotal witness not only for federal prosecutors, but also for the defense. Walker's attorneys likely will try to pin Bixby's downfall on him. They have painted Walker, 71, as an entrepreneurial dreamer who naively surrounded himself with criminals.
Desender said that as he found more and more people to invest in the private company — and collected a 10 percent commission for fundraising — Walker demanded that half the money be kicked back to him. "He said, 'I need you to split the commissions,' " Desender testified.
Walker, best known as founder of Select Comfort Corp. and inventor of its famous adjustable bed, is on trial for fraud, conspiracy, tax evasion and witness tampering. He is accused of defrauding 1,800 investors out of $57 million. He co-founded Bixby in 2001, and was chief executive until his ouster in 2011.
The company, last based in Ramsey, initially sold corn-burning stoves and then began promoting a clean-coal technology that failed in its first commercial installation two years ago in China. Prosecutors say investors lost everything.