By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
Few dreamers believe in their dream the way William Orr did.
He chased his idea, a search for the perfect fuel to put in a gas tank, for three decades. He conducted test after test, applied for patent after patent, and transformed his quest into a business and a cause. He traveled around the world to promote and defend it. He lobbied and borrowed and worked slavishly to keep it running, keep it on track.
But sooner or later, every entrepreneur has to confront a world of disbelievers — people who think the dream is a fantasy and the product is worthless. Orr's brutal awakening came last May, in a federal courtroom in downtown Denver, as he listened to the verdict of a jury of his peers. The verdict form was long and complicated, like the criminal trial itself, but the findings were not. The word "guilty" was uttered 23 times.
Guilty of mail fraud. Guilty of wire fraud. Guilty of making false statements to the Environmental Protection Agency. Guilty of failure to file tax returns. Guilty. Guilty. Guilty. Several of the counts carried potential prison sentences of up to twenty years.
Orr stood silently, trying to process what he was hearing. At the end of the trial, after seven weeks of mind-numbing testimony, he'd been convinced that the prosecution hadn't laid a glove on him. Despite the battery of charges he was facing, much of the fraud case came down to a single issue: whether Orr had misrepresented to investors and to the government the potential of the formula he was trying to market — a fuel blend that he claimed would be cheaper, cleaner and more efficient than conventional gasoline. The government had called dozens of witnesses, including a few disgruntled investors, to testify against him; Orr had fought back with well-respected scientists and experts from the arcane world of alternative fuels. He had taken the stand himself for days, describing how the EPA had shut him down, just when an independent lab was ready to begin rigorous testing of his product that would prove or disprove its value once and for all.
He had told the jury how it was, and he'd thought he'd made some points. As the deliberations stretched into five days, he began to wonder if he'd merely confused them. But he hadn't expected to be judged a fraud and a cheat.
"I was stunned," he says now. "To realize that your life effort, doing what you thought was good for the public and the environment, was being rewarded with a guilty verdict, with a long prison sentence potentially attached to it — I just had this massive disbelief. Were these guys at the same trial I was at?"
Orr has not yet been sentenced; a hearing in the matter is scheduled next month before Judge Lewis Babcock. His trial received scant press coverage, and what ink it got was largely devoted to the passing involvement of U.S. Senate candidate Bob Schaffer, who served briefly on the board of directors of the National Alternative Fuels Foundation, the nonprofit Orr launched to promote his product and others. (After the trial, liberal bloggers conjectured that the former Republican congressman arranged the $3.6 million federal grant that NAFF received to test Orr's fuel; they were wrong.) Yet interviews with numerous people associated with the Orr case — investors, jurors, chemists, fuel promoters, business partners and others — indicate that Orr's crime isn't quite as clear-cut as the verdict would suggest.
The jury, of course, had a very different impression of what was going on at NAFF and Orr's investment venture, Octane International, than he did. "It seemed like he scammed everybody," says Walter Roberts, one member of the panel. "If I had the money, I probably would have invested in it myself. But a lot of things didn't look right. I think [Orr] was his own worst enemy."
Yet even some jurors don't believe that Orr set out to swindle anyone; they say they were simply following the letter of the law and their specific jury instructions when they found him guilty of making false statements. "He was making bold statements on some pretty slim tests," says one, who asked not to be identified by name, "but I don't think he intended to commit a crime."
Many white-collar fraud prosecutions begin with complaints from the victims of the scam. In the case of William Orr, government investigators had to practically recruit investors to testify against him. Several investors, including some of the prosecution's own witnesses, still defend Orr, saying that his product could be worth millions or even billions of dollars if the government would quit putting roadblocks in its path.
"The pressure to pursue this was always from the government, not the investors," says Scott Shires, a Republican political consultant who worked closely with Orr at NAFF and helped to recruit many of the investors in Octane. Shires, who pleaded guilty to misdemeanor charges of failing to file corporate tax returns and testified as a prosecution witness at Orr's trial, earning praise from Babcock for his honesty, has since received a year's probation and a small fine. "Based on what Bill is facing, I consider myself exceptionally lucky," he adds.