(EnviroNews Idaho) — Boise, Idaho — Plans to build a nuclear power plant in southwest Idaho may be bust as a federal investigation spanning several years culminated with a grand jury handing down 14 criminal indictments against former executives of Idaho-based Alternate Energy Holdings, Inc. (AEHI).
Former president and company founder Donald Gillispie, 71, and former senior vice president of administration and secretary Jennifer Ransom, 40, are charged with 14 counts of conspiracy, securities fraud, wire fraud, filing false tax returns and making false statements to federal agents. Also included in the indictment was a charge against Ransom for lying to federal investigators about her personal, intimate, relationship with Gillispie.
The Idaho Statesman reported Gillispie’s initial appearance was Friday; he pled not guilty to the charges and a trial has been set for January 13. It was reported Ransom has not yet been arraigned.
AEHI is a development stage company in Idaho planning to construct and operate a nuclear power plant in Payette County.
According to a press release from the Department of Justice issued Friday, Gillispie and Ransom are alleged to have conspired to manipulate and inflate the market price of company stock traded on the public over-the-counter and Pink Sheet markets.
According to the indictment, during a period when AEHI had been attempting to artificially inflate its stock, Ransom sold 1,000,000 shares for $675,000; she gave $190,000 of that money to Gillispie.
During that same period, relatives of Gillispie sold 10,778,000 shares of their company stock for over $3.7 million.
The indictment charges that AEHI raised about $14 million in capital financing from private investors between October 2006 and October 2010 but did not have any income, while Gillispie and Ransom were simultaneously receiving significant salaries and compensation not reported as income to the Internal Revenue Service.
Emails between Gillispie and one stock promoter illustrate how brazen the former executive was about inflating the price of AEHI stock.
“Trust all is well … I need you back on the job monitoring and boosting the stock price … we should not close at 82 cents over a long weekend like the one…” an email on January 14, 2007 states.
Gillispie followed up two days later, on January 16, 2007, with another email stating: “…please buy some stock this afternoon … we are stuck on 82 cents since last Friday with a 45 cents bid showing.”
In July of the same year Gillispie pleaded to have the stock price increased. Emails show him instructing, “Please buy some shares at $1 or higher today … trying to break the dollar barrier and stay there.”
“I don’t see any evidence of you buying stock and keeping us at a $1.00 or higher nor are your friends moving the pile … volume numbers look the same… Help the time is now… talking with big investors this week… got check for $250,000 yesterday… please get going,” Gillispie emailed on July 18, 2007.
“Those who manipulate securities markets and deceive investors pose a significant risk to our financial system,” said United States Attorney Wendy Olson in a prepared statement. “Those who further defraud the United States and their fellow tax payers by failing to pay taxes on their ill-gotten gains must not be allowed to manipulate the system. The Department of Justice and its federal law enforcement partners will vigorously investigate and prosecute such conduct.”
It’s unknown if Thursday’s indictments dampened the optimism of the company’s current president for building a nuclear power plant.
On October 20, AEHI President J. Peter Honeysett was in front of Payette County Commissioners talking up the company’s plans despite the ongoing legal problems.
At that meeting, Honeysett wasn’t discussing the DOJ’s current indictment but a separate civil case being pursued against AEHI and its former executives by the Securities and Exchange Commission filed in 2010.
“Do you think the (Securities and Exchange Commission) charges are a deal killer?”
-asked Commissioner Larry Church during the meeting.
Honeysett didn’t think so, telling the commission investors were waiting to fund the multi-billion-dollar project once the SEC case settled.
In its civil case the SEC alleges Gillispie and Ransom defrauded investors and sold stock illegally.
Gillispie has prolonged the case up in part, by failing to pay his attorneys. In 2012, K&L Gates Attorney Barry Hartman, of Washington, D.C. was allowed off the case after Gillispie failed to pay him approximately $700,000 in legal bills.
Nevertheless, the SEC’s case could soon be coming to a close. In October the regulator filed for summary judgment. In addition to civil penalties it is seeking recovery of the over $14 million Gillispie and Ransom are alleged to have fleeced from shareholders.
Calls to AEHI headquarters for comment on the indictment and the company’s future plans were not returned.
AEHI faced scrutiny early on and has been in and out of court for many years.
In January 2009 the Fourth Judicial District Court in Ada County dismissed a lawsuit brought against the nuclear watchdog group Snake River Alliance (SRA).
Then SRA Executive Director Andrea Shipley referred to the company and Gillispie as “scammers,” while raising the red flag on its financial operation.
AEHI, in its complaint, unsuccessfully tried to persuade the court to make SRA and Shipley retract their statements, prohibit such future speech and award monetary damages.
In another case, AEHI settled a class-action suit brought by a group of investors for $450,000 in 2012.
Reporter note: Full disclosure: AEHI tried dragging my name through the mud as well. In June 2008, as a freelance reporter for the Times-News, I was asked to cover a community meeting the company was holding in Owhyee County (AEHI shopped several locations before settling on Payette County).
At that meeting a southern Idaho anti-nuclear activist was arrested and charged with trespassing and battery. My article about the events, along with another reporter’s photo, was soon thereafter published.
Events took a turn for the weird in the coming weeks. AEHI released a letter written by investor and stock promoter James Cooper to Gillispie after the community meeting. This letter was sent to several local newspapers (and published in at least one local newspaper) accusing me of “apparent fabrication of a news story,” and saying I should be “reported.”
The only problem with Cooper’s description of my actions is that he had no idea what I even looked like.
He said I was a middle-aged woman with shoulder-length silver hair who was “too cozy” with the Snake River Alliance. At the time I was 26-years-old and had very short, red hair. Both Cooper and AEHI’s public relations folks promised to officially retract their allegations about me but never did.