The founder of a Kansas City company that duped investors for millions of dollars -- and used a group of local ministers to help its cause -- has been arrested and charged by federal prosecutors.
The United States Attorney's office has announced charges of two felonies against Owen Hawkins, the embattled CEO of Petro America, a purported oil and gold-mine company that claimed to be worth almost $300 billion and scammed investors for millions.
Hawkins, 55, started Petro three years ago, in an attempt to capitalize on climbing oil prices. Since then, he's sold hundreds of thousands of unregistered shares of stock in the company, many of them to middle- and working-class people in Kansas City's inner city.
He's dumped almost none of that money into the company, the feds say, but rather has used it to line the pockets of him and his friends, buying cars, a fur coat and other luxuries. (Read the full story at pitch.com or in this week's print edition of The Pitch.)
When the Missouri Secretary of State's Office issued an order to cease and desist the selling of Petro shares in 2008, Hawkins ignored it, continuing to win investors in Kansas City and across the nation -- and he did it with help from a group of Kansas City ministers, who owned shares in the company and were continuing to sell those shares, investors say.
The U.S. Attorney's office stepped in last week, filing an 80-page affidavit that called Hawkins an unequivocal fraudster. But through last night, Hawkins was still holding fast to the Petro dream.
Shareholders are invited to bring guests to Petro meetings -- more potential investors! -- and I was invited by Wiley Scruggs, the company's most vocal (and least favorite) shareholder.
Scruggs, a fearless shit disturber, was there to show the affidavit to everyone he could, and to prove what he's believed for years: that Petro is a scam. He also planned to pass out the number to the U.S. Attorney's office.
I walked with Scruggs into the eighth-floor ballroom, signed in, and sat down to a white-clothed table. A guest speaker talked about how to invest money, although I didn't hear the word "Petro" mentioned once. Seconds later, a big man walked over to me, bent down, and whispered in my ear: "You need to leave."
Despite Scruggs' protestations that I was his guest, the man said I was part of the media and wasn't authorized to be there. I obeyed, retreating downstairs to the attached restaurant.
Meanwhile, up on the eighth floor, Scruggs got word that Jeanne Tucker, the ringleader of the shareholder meeting (and CEO of All-Access Insurance, an alleged Petro subsidiary) was going to call the police. Since Scruggs didn't recognize any of the new faces at the meeting -- and since Petro had called the police on him before -- he left and met me downstairs in the restaurant a few minutes later.
So did two police officers.
One of them -- a short, bald guy with dark caterpillar eyebrows and an ear-to-ear grin -- did all of the talking. The other cross-armed officer didn't once move the straight line that was his mouth. "They don't want you back on the eighth floor," the officer told Scruggs. He explained that since it was a private meeting, Petro called the shots.
"If it's a private meeting and you're in the organization, you're entitled to be there," Scruggs said. "They're renting the space with Petro's money." Scruggs offered to show the cop proof: "I keep my certificate with me like my driver's license," he said.
The officer cracked a sheepish smile. "I'm here to preserve the peace," he said, helplessly.
Around this time, some members of the "Ministers Alliance" -- a group of ministers who own and promote Petro stock -- were standing watch over the elevator. I asked if they'd like to answer a few questions. "Nah, we don't wanna see your face ever again," one of them, a convicted rapist named Martin Roper, told me.
Back at the restaurant, a shareholder told me that Hawkins had just arrived.
Hawkins, who rarely attends shareholders meetings, had eluded my phone calls, a house visit, and my smoke signals. I sat eagerly on the couch by the elevator, waiting for Hawkins to come down. But the ministers told the police that I was causing a disturbance, and there was the same cop, looking like he'd rather be anywhere else, telling me that I had to leave the hotel.
Later, as the ministers filed out, I waited outside to talk to Hawkins. But I saw everyone except the CEO, who had steered clear of the restaurant and escaped my reportorial clutches once again.