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Backed by local ministers, Petro America promised investors millions -- but it's the CEO who got rich

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The jazz-fest failure was just the latest for Hawkins. In 1991, court records show, a judge ordered him to pay $15,000 to Doretha Bryant, niece of barbecue legend Arthur Bryant, after Hawkins tried to strong-arm his way into the family's barbecue business. Hawkins hasn't filed a personal income-tax return since the mid-1990s, he has told investigators, doesn't have personal bank account, and until the mid-2000s lived in subsidized housing. Not long before starting Petro America Corp., he filed for bankruptcy, court records show.

Hawkins created Petro in 2007, when sky-high oil prices were dominating the news. Billing it as a "global crude oil marketer" and "energy arbitrageur," he built a shiny website with the slogan "world success unrivaled."

In 2009, Hawkins told Forbes magazine that Petro was valued at about $100 million, and in recent months he's told investors it's worth $284 billion, according to documents filed in federal court – a figure that would make it the second-largest company in the United States. The company also claimed to have hundreds of acres in oil and gas leases in Missouri, plus partial ownership of eight gold mines, a granite mine, and a purchase order for 2 million barrels of crude oil. There are subsidiaries, too, the website boasts: an alternative energy company, a financial services provider, a packaging company, a tech company, an insurance company and an electric-car company. Hawkins' goal, he has said, is to win the Nobel Peace Prize.

But investigators have revealed Hawkins' promises to be empty. The U.S. Attorney's office recently filed an affidavit from a Treasury Department investigator, who says that while investors have pumped more than $5 million into the company, only a “small fraction” of that revenue was reinvested in Petro. The rest was spent on “houses, luxury cars, a $5,700 fur coat, a $37,000 boat, a $5,200 piece of Louis Vuitton luggage” and other extravagances. The company has “no significant revenue,” according to the affidavit, “and no realistic plan” to create any.

The affidavit labels the company what investors like Scruggs have long feared it was: a “scam” and a “get-rich-quick scheme.” Its professional-seeming website is a mess of dead links and careless misspellings. Its headquarters is nothing more than a “virtual office,” with a secretary to forward calls and mail. An office in Kansas City, Kansas, is equally desolate – just an empty room in a suite shared with a construction company owned by Hawkins' sister.

An official at Missouri’s Department of Natural Resources tells The Pitch that Petro has no oil or gas leases in the state. The company's mining claims, meanwhile, are part of a “classic gold mine scam,” the affidavit says. To substantiate wild claims about the company's worth, “Petro adopts wildly high valuations” for its mining claims, which are little more than piles of rocks. “Its so-called 'interests' in the gold and rock mines are essentially worthless,” according to the affidavit.

Petro’s subsidiaries appear equally flimsy. The company did buy a majority stake in Lenexa-based Performance Packaging Group, one of that company's partners told The Kansas City Star last year. But Petro paid in part with unregistered shares of overvalued stock. According to the Kansas Secretary of State's office, two other subsidiaries – an electric-car company and a financial services company – are registered to the same address as Petro's empty Kansas City, Kansas, office. Ted Wiley, the former “CEO” of the car company – called Transworld Automation – tells The Pitch he quit after Hawkins failed to pay him for two years of work. The former head of PetroAmerica Financial Services says he quit, too, after being denied pay.

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