KANSAS CITY, Mo. (AP) - A federal appeals court panel has upheld the convictions of five people for bilking mostly poor investors out of millions of dollars with promises that they could become wealthy beyond their wildest dreams by spending as little as $100.
Petro America Corp. owner Isreal Owen Hawkins, 60, of Kansas City, Kansas, was convicted in May 2013 of conspiracy, securities fraud, aggravated currency structuring, money laundering and two counts of wire fraud and was sentenced to 30 years in prison without parole. Four other top leaders in Hawkins' Missouri-based company - Teresa Brown, Johnny Heurung, William Miller and Martin Roper - were convicted of conspiracy to commit fraud.
A three-judge panel of the 8th Circuit U.S. Court of Appeals said Wednesday that it found no reason to overturn any of the convictions.
"In sum, the government's evidence overwhelmingly established that Petro America was a sham entity that had no real value and that Hawkins, along with several of his co-conspirators, used the company as a vehicle to dupe thousands of unwitting investors out of millions of dollars," the court wrote.
Hawkins founded Petro America in Kansas in 2007 and later moved its headquarters to Missouri, where he rented a "virtual office" in a high-rise near the Crown Center shopping mall in Kansas City. He started selling unregistered stock to investors - many of them poor, elderly churchgoers - in 2008 at a cost of $100 per 100,000 shares, promising them that "book value" of the stock would be $2 per share when the company went public.
The company recruited investors through churches, whose pastors promoted Petro as a once-in-a-lifetime opportunity to "share the blessing."
While Hawkins claimed his company had $284 billion in oil well and mining interests, he couldn't afford an attorney and dismissed his public defender before trial, choosing instead to represent himself.
The five were accused of selling $7.2 million worth of unregistered stock and targeting poor investors who weren't qualified to purchase shares.
During his trial, Hawkins told jurors the company was legitimate and that the only reason it didn't go public was because the federal government wanted to destroy it.
The government countered that shares of Petro stock were worthless.