Testimony concluded Thursday in the Bixby Energy fraud case with an intense witness-stand showdown between 71-year-old defendant Robert Walker and Assistant U.S. Attorney David MacLaughlin, who accused the inventor of the Sleep Number bed of outright lying and misleading shareholders.
Testimony in ex-Bixby CEO's fraud trial case concludes after seven weeks
"You're a hard man to pin down," prosecutor tells ex-CEO Robert Walker during last hours of often-combative cross-examination.
February 28, 2014 at 5:59AM
"Your honor, I've had enough," MacLaughlin told U.S. District Judge Susan Richard Nelson as his cross-examination of Walker reached the five-hour mark over two days of testimony. "This cross is over."
Walker, who testified on his behalf over parts of three days this week, is charged with fraud, conspiracy, tax evasion and witness tampering for his actions at Bixby Energy Systems.
After seven weeks of sometimes grueling testimony, the criminal trial of the former Bixby CEO is poised to enter its final stage next week when jurors will be asked to determine the guilt or innocence of the Minnesota businessman who's accused of corporate malfeasance, deception and self enrichment in a failed effort to develop alternative fuels.
Nearly 2,000 investors lost $57 million when a coal-to-gas conversion process failed to work at the commercial level and the company ultimately failed.
Walker repeatedly defended his actions during his 10 years at Bixby and sparred with a clearly frustrated MacLaughlin. Walker insisted that payments to him from Bixby's chief fundraiser were loans, not kickbacks, as alleged by the government.
"I know that's your testimony but the United States of America believes that is inaccurate information," MacLaughlin said about the payments to Walker from convicted embezzler and former Bixby Chief Financial Officer Dennis Desender.
MacLaughlin suggested that Walker and Desender backdated a phony loan agreement to cover up the purported kickbacks.
"With all due respect, that loan agreement was written on the date of that agreement," Walker shot back.
Walker also said he shut down audits of the company's finances that might have shown the source of funds paid to him because the audits were costly and Bixby's board of directors would have used the audit results to shut down the company.
"I sincerely believed that the shareholders made their investments partly because of me and not the board. I was responding to them," Walker said.
MacLaughlin thought otherwise.
"When people tell you to follow the law it irritates you," the prosecutor told Walker.
MacLaughlin also zeroed in on a Bixby newsletter to shareholders in 2007 that stated that the company had just entered an "exclusive U.S. agreement" with an engineering firm to produce coal gasification machines when in fact the engineering company had terminated the agreement almost two weeks earlier for lack of payment.
Walker said the newsletter was correct about the agreement when it was written but there was a delay in the time before it was distributed to shareholders.
"You're a hard man to pin down," MacLaughlin said at one point in his cross examination.
David Phelps • 612-673-7269
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