When Alternate Energy Holdings Inc. and its CEO Don Gillispie, skated away from fraud accusations in a federal courtroom in February, Securities and Exchange Commission attorney Mark Fickes was visibly upset. As Gillispie, his attorneys and AEHI colleagues exchanged smiles and handshakes, Fickes told BW that he would not comment for the record but wanted to make clear that his file on AEHI remained open (BW, News, "AEHI Back in Business," Feb. 9, 2011). On July 7, that file became a bit larger.
In an amended complaint, the SEC alleged that AEHI and Gillispie defrauded the public through a series of so-called "private placement memoranda," telling investors they should rush to buy stock before a "public offering." AEHI never engaged in a public offering, according to the SEC, because it was already a publicly traded company.
The 27-page amended complaint totaled more than 90 charges against AEHI, Gillispie and his former colleague, Jennifer Ransom. AEHI's first full-time employee, Ransom resigned in June as president of Energy Neutral, an AEHI subsidiary.
"They're throwing more darts against the wall and hoping one will stick," said AEHI attorney Richard Roth.
On June 20, Payette County commissioners voted unanimously to rezone a parcel of property where Gillispie wants to build a $10 billion nuclear reactor (BW, News, "The Butcher, the Baker and the Candlestick Maker," June 8, 2011).
"There will soon be major announcements that show we are very serious about building a nuclear power plant and progress on our other business units," said Gillispie.
But the SEC, referring to AEHI's Form 10-K for fiscal year 2010, said the company had "minimum liquid assets" and "will be reliant upon stock and/or debt offerings to fund any kind of nuclear operations."
The SEC complaint alleged AEHI "had spent substantially all the cash it had raised from investors." But in a Nov. 12, 2010, interview, Gillispie said that in the long term AEHI "could rival ExxonMobil in profitability."
The SEC also stated that while Gillispie claimed his compensation in 2009 was $133,000, he also set up automatic debits from AEHI so the company would pay $3,000 per month for his Idaho home.
"Gillispie also submitted at least $143,456 in credit card bills for travel, food and season tickets to football games. Gillispie received at least $55,000 of additional undisclosed cash from AEHI in 2009," the complaint alleged.
Gillispie was also accused of lying about overseas AEHI offices. In letters to investors, Gillispie said AEHI had opened offices in Beijing and Seoul as well as a franchise office in Lagos, Nigeria.
"AEHI and Gillispie knew, or were reckless in not knowing, that their claims to investors and the public about AEHI's purported international offices and subsidiaries were false and misleading," reads the SEC complaint.
Gillispie and Ransom will appear in Boise's U.S. District Court on Sept. 27, when they will look across the aisle and again see Fickes and his ever-growing file on AEHI.