Sitting in an orange jailhouse jumpsuit with his head bowed, the elderly Twin Cities businessman who invented the Sleep Number bed and later spent millions of other people's money trying to convert coal to natural gas learned Thursday he'll likely spend the rest of his life in jail.
Judge sentences ex-CEO to 25 years in Bixby fraud
Sleep Number founder likely to die in prison for coal-to-gas scheme.
September 26, 2014 at 4:15AM
A federal judge in St. Paul sentenced Robert Walker, who was convicted in March of defrauding investors in Bixby Energy of $57 million over a decade, to 25 years in prison.
His attorney said the 72-year-old, who started the successful bed maker Select Comfort before embarking on Bixby, "will probably not have a fresh breath of air again" as a free man.
"I apologize to my family, my friends and my investors," Walker said softly before the sentence was read.
Then, U.S. District Judge Susan Richard Nelson sternly delivered her ruling.
"You caused devastating, lifelong injuries to hundreds of faithful investors," Nelson said. "You're barely accepting any responsibility for this destructive activity. You don't seem to feel remorse for the extraordinary pain felt by so many people. You're someone who cares more about themself."
After a seven-week trial, a federal jury convicted Walker on charges of fraud, tax evasion, witness tampering and conspiracy for repeatedly misleading investors about the prospects for success of his alternative energy company, Bixby.
About 1,800 people invested in the company, which Walker co-founded in 2001. The business was originally focused on producing corn-burning stoves to heat homes. When that business collapsed because of high corn prices, Walker turned Bixby's focus to developing a coal-to-gas technology. But it never worked.
The business folded in 2012, a year after two Bixby directors sued to oust Walker.
In court Thursday, Walker's defense attorney, Peter Wold, described him as a "naive" businessman who believed in the technology he promoted. "He did not set out to cheat anyone," Wold said.
Assistant U.S. Attorney David MacLaughlin portrayed Walker as a calculating, opportunistic individual guided by greed.
"Dollar signs determine what Mr. Walker believes and what he doesn't," MacLaughlin said. "He was a leader among crooks. He was a master manipulator … He has this narcissistic focus on himself."
Although Walker testified during the trial that he never intended to cheat anyone, evidence revealed that Bixby had employed two felons, including one Walker hired as chief financial officer and seeker of investment funds. Testimony also revealed that he battled with board members who disagreed with his leadership.
As for investors, testimony showed that Walker made repeated predictions that the company would soon be publicly traded to their benefit. He also gave glowing but unsubstantiated reports on the progress of coal gasification technology.
He has been behind bars since August 2013, when his parole was revoked after he attempted to contact a government witness through a third party.
In the 1980s, Walker achieved success by creating an adjustable air mattress and starting Select Comfort Corp. The mattress eventually became known as the Sleep Number bed and the company today has nearly $1 billion in annual sales. Walker left the firm in 1991, years before its meteoric growth and 1998 stock listing. A witness during the trial said the company was having financial trouble when he left.
Nelson opened the courtroom for comments and both friends of Walker as well as jilted investors took the chance to speak.
One of those was Marion Mast, who described himself as a Bixby co-founder. He said he witnessed "underhanded" actions by Walker with the company's board of directors and said when he was fired "it saved my life."
Others described Walker as trustworthy and self-confident.
"Whenever I had issues, Bob always had an open door and was cooperative," said George Bonfe who described himself as an early investor in the corn-burning stove business. "I always felt comfortable with him. He was never a hard-selling guy."
The judge at one point in the proceeding called Walker's crime "a magnificent fraud."
"We hold people accountable for pain and injustice they cause others, and I hold you accountable," she said.
David Phelps • 612-673-7269
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