Petro founder says lies, race led to conviction

KANSAS CITY, Mo. (AP) — A former Kansas businessman convicted earlier this year of bilking investors out of millions of dollars by selling stock in a company with virtually no assets says misconduct by federal prosecutors and a racially imbalanced jury are a few of the reasons why he should get another day in court.

Isreal Owen Hawkins, 58, of Kansas City, Kan., was found guilty in May of conspiracy, securities fraud, wire fraud, money laundering and other charges related to a purported oil and mining operation he founded, Petro America Corp., which he claimed was worth $284 billion.

Four other top leaders of the Missouri-based company also were convicted in the 17-day trial for their roles in the $10.2 million scheme. All five are scheduled to be sentenced in early October.

In a 45-page brief he submitted in federal court in Kansas City, Mo., on Wednesday seeking a new trial, Hawkins compared himself to Marcus Garvey, an early 20th century black businessman who sought economic independence for African Americans but ended up being sentenced to five years in federal prison.

Garvey was charged with mail fraud in 1922, represented himself at his trial and was found guilty of a single count. Decades later Garvey was praised by a congressional subcommittee for his efforts to lift up the African American community by providing economic opportunities, Hawkins wrote in his brief.

Hawkins, who also represented himself at trial, called Petro America "the People's Company" and told investors his goal was to win a Nobel Prize for creating massive wealth for the poor and middle class.

"As in the Marcus Garvey case the defendant herein has suffered relentless scrutiny and harassment from the U.S. Justice Department," he wrote.

Hawkins said prosecutors lied when they told jurors Petro's assets were as "useless as tissue paper," noting that a California gold mine in which Petro had a 25 percent stake sold earlier this year for $5 million.

That property, Josephine Pine Tree Gold Mine, had a valuation of $2.7 billion to $8.2 billion, Hawkins wrote.

Prosecutors said all five defendants in the Petro case illegally sold unregistered stock to people who weren't eligible to invest in risky startups, many of them poor and elderly churchgoers who were told by their pastors the opportunity was a blessing from God. Thousands of people paid as little as $100 for 100,000 shares of Petro stock with promises that it was on the verge of going public and would be worth at least $2 per share when it did.

Much of the stock was sold through a group of pastors called the Minister's Alliance, or "White Hat Guys" because of the white fedoras Hawkins gave them. The ministers also served as Hawkins' personal security force.

Prosecutors said Hawkins "gifted" people hundreds of millions of shares, some of which he had printed up while the recipients waited, according to testimony at his trial.

He could be sentenced to up to 20 years in prison for his most serious conviction, wire fraud. His co-defendants — Teresa Brown, Johnny Heurung, William Miller and Martin Roper — were convicted of conspiracy to commit fraud, which carries a maximum sentence of five years in prison.

In addition to lying about Petro America, prosecutors violated his constitutional rights by failing to make sure the jury — which included one black member and no Hispanics — represented a cross-section of the community, Hawkins said.

"The prosecution's acts equate to corporate lynching of the African American defendant in this case," he wrote.

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