Dennis Luverne Desender was Sentenced for Securities Fraud and Tax Evasion

Source- http://www.fbi.gov/minneapolis/press-releases/2012/former-cfo-at-bixby-energy-sentenced-for-securities-fraud-and-tax-evasion

MINNEAPOLIS—Earlier today in federal court in St. Paul, the former acting chief financial officer for Bixby Energy Systems Inc. was sentenced for lying to investors to get them to commit large sums of money to the business and for failing to file federal tax returns and reporting his income for three years, which resulted in a tax loss for the Internal Revenue Service of $825,866.

United States District Court Judge Susan Richard Nelson sentenced Dennis Luverne Desender, age 65, to 97 months on one count of securities fraud and one count of tax evasion. On September 14, 2011, Desender was charged and pleaded guilty to securities fraud. On February 23, 2011, he was charged and pleaded guilty to tax evasion.

In his plea agreement, Desender admitted that from January 2010 through May 2011, he and others used manipulative and deceptive practices in an effort to sell securities. During that time, Desender was a consultant for Bixby Energy but had previously been the company’s chief financial officer in charge of raising funds for Bixby projects, including a coal gasification energy system. Desender also admitted soliciting unqualified investors to invest in the company. In exchange for investment funds, investors were sold Bixby securities.

While some investment money was used by Bixby, Desender spent a significant portion of the funds on salaries and commissions for himself and others. Desender routinely provided false information to investors to induce them into remaining financially involved with Bixby and to potential investors to entice them into initiating investments. Among other things, Desender concealed information regarding the coal gasification project, telling investors and potential investors that it was ready for market, when, in fact, it was not. Desender was responsible for approximately $4.3 million in investor losses.

Desender also admitted that he failed to file tax returns for tax years 2005 to 2008. In addition, he admitted that on October 17, 2005, he filed a false Form 1040 tax return for the tax year 2004, failing to report gross receipts of $31,878 and falsifying $314,885 in business deductions relative to his Blooming Prairie, Minnesota, financial consulting business.

As a result of the criminal investigation against him, Desender already has filed the appropriate tax returns and intends to file an amended 2004 return.

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