News Column

Witness in Bixby fraud trial broadens financial picture

February 4, 2014

By John Welbes, Pioneer Press, St. Paul, Minn.

Feb. 04 --When Dennis Desender put an addendum on his will in 2009, he included language saying that if he died, a loan he made to Robert Walker -- his boss at Bixby Energy Systems -- would be forgiven. Desender now is testifying against Walker at Walker's fraud trial in St. Paul and hoping to shorten his own eight-year prison term. Desender's addendum forgave the loan because, it says, "the Walkers have been some of my dearest friends." Were they? asked Peter Wold , Walker's defense attorney. "Uh, they were OK," Desender said. Walker, who earlier gained attention as the founder of Select Comfort , the sleep number bed company, is on trial for 18 fraud-related charges. He's accused of lying to investors in his next venture, Bixby Energy, and defrauding 1,800 people out of $57 million . Wold's questioning Monday came after Desender spent almost three days last week on the witness stand for the prosecution. "I couldn't call him naive," Desender said of Walker, 71, who ran Bixby Energy from the early 2000s until 2011. But there were certain parts of the business that Walker didn't understand so well, Desender said. While Walker's strength was creativity and inventiveness, he needed Desender's help putting together a business plan, and he needed Desender's fundraising ability. Desender, 66, already is serving his sentence at the federal prison camp in Duluth , having pleaded guilty in 2012 to fraud charges related to his role at Bixby. Walker's defense team worked Monday to discredit Desender's earlier testimony of how fraud materialized at Bixby Energy. Desender served as Bixby's acting CFO for almost a decade and brought in millions in investments for the fledgling company. And, over the years, Desender received millions in "finder's fees" for bringing in investors' cash. The arrangement later included Desender giving half of his money to Walker. There's been lengthy testimony -- including Monday's last will and testament discussion -- about whether the money was straight-up sharing or a loan that Walker would later pay back. Desender also admitted Monday that he "lived large" during his years at Bixby. That included owning "a couple" of Rolls Royces. He also would often pay large parts of the tab for international travel for friends to accompany him on trips. In his later years at Bixby, he used alcohol "extensively," Desender told Wold. Asked about the frequency of his drinking, Desender said, "I don't know if it was every day, but it was a lot." Other lines of questioning from Wold pointed to the defense strategy: working to show that Walker was misled and manipulated by many people around him. That included a prospective investor from Chicago , a firm that was helping Bixby get a foothold in China , and the engineers working on Bixby's coal conversion technology in North Carolina . Desender agreed with Wold that he knew then that Walker wasn't a rich man, and knew that he was providing substantial assistance to his daughter, who had a serious arthritic condition. Last week, questions from prosecutors focused on Desender's initial belief that Walker was well-to-do because of Select Comfort , and because he had a large waterfront home in Ramsey, Minn. Bixby Energy Systems, which pitched a coal-to-gas conversion process, had started to collapse by 2010, as investors and business partners started raising questions about day-to-day operations at the company, which quickly was running out of cash. John Welbes can be reached at 651-228-2175. ___ (c)2014 the Pioneer Press (St. Paul, Minn.) Visit the Pioneer Press (St. Paul, Minn.) at www.twincities.com Distributed by MCT Information Services


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Source: Saint Paul Pioneer Press (MN)


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