United States v. Robert Allen Walker
2016 U.S. App. LEXIS 5587
| 8th Cir. | 2016Background
- Robert Allen Walker founded and led Bixby Energy Systems from 2001 until his ouster in May 2011 after the company collapsed; he was convicted by a jury of mail fraud, wire fraud, conspiracy, witness tampering, and tax evasion following an eight-week trial.
- Bixby developed corn-burning stoves (unprofitable after 2006) and later pursued unproven coal-gasification technology and purported Chinese deals that never materialized.
- Walker allegedly induced investments by misrepresenting his role in Select Comfort, promising imminent IPOs while concealing obstacles, and using promotional materials (video, white paper, press releases) to falsely portray technology and orders.
- He concealed criminal backgrounds of key employees, caused violations of securities rules (e.g., misrepresenting investor accreditation, paying unlicensed commissions), and received approximately $600,000 in kickbacks from CFO Dennis DeSender.
- After an audit revealed improprieties, Walker removed pro-audit directors, terminated the audit, backdated a “loan” to explain kickbacks, increased his salary, and later drafted an email that the jury found constituted witness tampering.
- At sentencing, the district court calculated investor loss at about $57 million for guideline enhancements, applied a two-level abuse-of-trust enhancement, and imposed a 300-month prison sentence (below the advisory life range).
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Sufficiency of evidence of intent to defraud | Jury could infer intent from scheme, misrepresentations, concealments, and investor losses | Walker claimed he was a naive businessman and genuinely believed in rescuing Bixby (e.g., $100M Manna Foundation effort) | Affirmed: evidence sufficient; credibility for jury to resolve; scheme and acts support fraudulent intent |
| Witness tampering | Email drafted to induce false statements and build a defense at trial constituted tampering | Email was aimed at saving Bixby, not influencing trial testimony | Affirmed: sufficient evidence supports tampering conviction |
| Tax evasion (treatment of $600k) | Payments were taxable kickbacks and Walker willfully lied to IRS | Walker claimed payments were bona fide, non-taxable loans | Affirmed: evidence supported jury finding of kickbacks and willful tax evasion |
| Sentencing — loss amount for Guidelines | Loss equals reasonably foreseeable pecuniary harm to victims; district court reasonably estimated $57M based on investor statements | Loss should be limited to Walker’s $3.4M personal gain or require net-loss offsets for legitimate market losses | Affirmed: district court did not clearly err in measuring actual loss as investors’ total losses under §2B1.1 |
| Sentencing — abuse of position of trust enhancement | Walker, as controlling officer/director, occupied fiduciary position and used it to conceal and facilitate fraud | Walker argued his role was not the type contemplated by §3B1.3 | Affirmed: evidence that he used his corporate trust position to conceal massive fraud justified enhancement |
| Sentencing — intervening Guidelines amendments | Amendments became effective after sentencing and are not retroactive | Walker sought benefit of amendments to reduce range | Denied: remand futile because resentencing would use guidelines in effect at original sentencing date |
Key Cases Cited
- United States v. Brown, 627 F.3d 1068 (8th Cir. 2010) (sufficiency review; intent need not be proven by direct evidence)
- United States v. Marquez, 462 F.3d 826 (8th Cir. 2006) (standard for upholding jury verdicts)
- United States v. Ervasti, 201 F.3d 1029 (8th Cir. 2000) (scheme may itself show intent to defraud)
- United States v. Alama, 486 F.3d 1062 (8th Cir. 2007) (jury credibility determinations on intent are virtually unassailable on appeal)
- United States v. Perry, 714 F.3d 570 (8th Cir. 2013) (willfulness and evidence required for tax evasion)
- United States v. Hodge, 588 F.3d 970 (8th Cir. 2009) (standard of review for loss calculation)
- United States v. Markert, 732 F.3d 920 (8th Cir. 2013) (net-loss approach and remand where repayment/transfer of value requires analysis)
- United States v. Markert, 774 F.3d 922 (8th Cir. 2014) (actual loss often measured by fair market value taken from victims)
- United States v. Miell, 661 F.3d 995 (8th Cir. 2011) (elements for abuse-of-trust enhancement)
- United States v. Anderson, 349 F.3d 568 (8th Cir. 2003) (review standards for trust-enhancement findings)
- United States v. Hayes, 574 F.3d 460 (8th Cir. 2009) (enhancement not for every fraud; misplaced-trust component discussed)
- United States v. Baker, 200 F.3d 558 (8th Cir. 2000) (fact-intensive inquiry into defendant-victim relationship for trust enhancement)
- United States v. Shields, 519 F.3d 836 (8th Cir. 2008) (discussion of retroactive guideline amendments on remand)