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Petro America founder is sentenced to 30 years in prison

Updated: 2013-10-09T02:19:13Z

By MARK DAVIS

The Kansas City Star

A federal judge on Tuesday sentenced Isreal Owen Hawkins Jr., the founder and central figure in the Petro America Corp. stock scheme, to 30 years in prison.

Hawkins, who had been convicted of six felony charges this spring, was taken into custody.

Prosecutors had charged that Hawkins and others defrauded 12,000 victims of more than $10 million. Nine others had pleaded guilty to various crimes and four others were convicted at trial alongside Hawkins.

Besides Hawkins, 10 others were scheduled for sentencing this week, with the rest to come in the following weeks.

“Mr. Hawkins was at the top of the pyramid,” Assistant U.S. Attorney Dan Nelson said in seeking the 30-year sentence. “He deserves the strongest and longest sentence.”

Investors from around the nation as well as Canada and the United Kingdom bought shares of the Kansas City-based company.

Many had been lured by religious appeals, were poor or had no investing experience. All were told that Petro owned gold mines, oil fields and other holdings worth $284 billion. The government argued that the claims were fake.

“I’m convinced you believe you have done nothing wrong,” U.S. District Judge Brian C. Wimes told Hawkins before imposing the sentence. “The jury has spoken to that issue.”

He also chided Hawkins for blaming others for the problems.

“You had the ability to stop it,” Wimes said. “You chose not to.”

At times, Wimes spoke emphatically and raised his voice when addressing Hawkins, who sat calmly. He said that Hawkins claimed to be fighting for the little guy, but that’s exactly who was hurt by the stock scheme.

Wimes said that Hawkins had “delusions of grandeur,” notably in comparing himself to famous figures — Mother Teresa and Bill Clinton, prosecutors said — and that Hawkins considered himself a candidate for the Nobel Peace Prize.

In making his appeal for a lighter sentence, Hawkins asked for “leniency and mercy,” adding, “There was no intent by me to defraud anybody.”

And he repeated claims that Petro was real, that the oil fields and gold mines were “producing,” that the “Mercedes I bought was 10 years old” and that he couldn’t control other stock sellers.

At one point, Wimes interrupted Hawkins to get him back to the issue, his sentencing.

“I’m very remorseful for the way things turned out,” Hawkins said.

And he noted that at age 58, a sentence of 30 years would be “like telling someone he’s going to die in prison.”

After Hawkins spoke, his father also appealed to the judge.

“He’s the only help I got,” said Isreal Owen Hawkins Sr., who Hawkins had said would turn 93 this week.

Hawkins’ sister then asked the judge to be lenient, adding that she had bought Petro America shares.

Wimes imposed the minimum sentence called for under federal sentencing guidelines but made clear at the proceeding that he was not bound by the guide. The 30 years was the length requested by the prosecution.

The sentencing guidelines would have allowed a life sentence for convictions on one charge each of conspiracy, securities fraud, aggravated currency structuring and money laundering and two counts of wire fraud.

Hawkins also was ordered to pay restitution of $10,221,735.29, though he had asked for a court-appointed attorney for lack of an ability to afford one.

Also Tuesday, Martin Roper of Kansas City, Kan., who was convicted of conspiracy at the trial, was sentenced to five years in prison and ordered to pay more than $10 million in restitution.

William Miller of Independence, convicted at trial of money laundering, wire fraud and conspiracy, was sentenced to four years and three months in prison and ordered to pay $165,731.14 in restitution.

Allen Collins of Raymore, who had pleaded guilty in April 2012, was sentenced to five years of probation and ordered to pay $186,074 in restitution.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com.

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