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Prosecutors seek 30-year sentence for Petro America chief

Updated: 2013-10-07T03:43:08Z

By BILL DRAPER

The Associated Press

Federal prosecutors are recommending a 30-year sentence for a Kansas man whose Missouri-based company bilked thousands of people out of more than $10 million by promising them immense wealth for investing as little as $100.

Two other top officials with Petro America Corp. also should spend decades behind bars for their roles in the scheme, prosecutors said, while five defendants who pleaded guilty and testified during a four-week trial should get probation.

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 Petro America, a purported oil and mining operation he founded and later claimed to be worth $284 billion.

Four other Petro leaders also were convicted for their roles in the $10.2 million scheme in which unregistered, “worthless” stock was sold to more than 12,000 investors. Nine others pleaded guilty before going to trial.

All five who were convicted and six who pleaded guilty are scheduled to be sentenced this week, starting with Hawkins on Tuesday.

In a sentencing memorandum filed last week in U.S. District Court in Kansas City — which continues to operate during the government shutdown — prosecutors urged U.S. District Judge Brian Wimes to sentence Teresa Brown to 25 years and Johnny Heurung to 20 years.

Attorneys for Brown and Heurung said the government’s recommended sentences would equate to life terms for their clients because of their age and health issues.

Recommendations range from 33 months to five years for six others, including Martin Roper and Bill Miller, who were convicted at the May trial.

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.

The government maintained that Petro stock was as worthless as tissue paper. Hawkins, who represented himself at the trial, continues to insist the company was legitimate and had real assets, and the only reason it didn’t go public was because the federal government wanted to destroy it.

Hawkins requested a new trial after learning one of the jury members had altered some of his suits purchased at an upscale Kansas City department store.

He later added accusations that prosecutors lied about the value of Petro’s assets, that the jury didn’t have the required racial balance, and that he was the victim of an overzealous government that persecuted him much like it did black businessman Marcus Garvey nearly a century ago for seeking economic independence for African-Americans.

Prosecutors called the Petro case one of the largest they have dealt with in western Missouri. During trial, they questioned how anyone could think a company whose founder was broke and living in subsidized housing could become one of the largest businesses in the world in only three years.

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