May 27, 2011 in City, News

Fraud scheme promised to harness lightning

By The Spokesman-Review
 

A Spokane man who claimed to have invented a computer chip that could capture energy from lightning strikes pleaded not guilty this week to federal charges that he defrauded investors of more than $2.5 million.

Robert B. Hiatt, 65, presented himself to investors for a decade as a successful inventor and businessman, according to the indictment on three counts of wire fraud returned Wednesday by a grand jury. Hiatt pleaded not guilty before U.S. Magistrate Judge Cynthia Imbrogno on Thursday afternoon.

According to the indictment, Hiatt claimed to have inside tracks to contracts with major companies and solicited investors using front companies that looked real.

Hiatt persuaded Bryan Teel, of Davenport, and other investors to put up $2.53 million by making “false and fraudulent representations,” according to court records.

To convince the investors, from whom he obtained money for fictitious bills for attorney’s fees, bank fees, taxes and other expenses, Hiatt created letterhead, e-mail accounts and other documents that made the companies, Highgate Computer Company and HighPlaces LLC, look legitimate.

By using the front companies, Hiatt was able to convince Teel and other investors that he had patents and sales contracts with General Electric, the United States General Services Administration, Sears, Clorox, Rain Bird and Pacific Northwest National Laboratory, which does business at the Hanford Nuclear Reservation, according to court records.

As part of the scheme, Hiatt convinced Teel and others to provide money to cash in on a non-existent contract with GE “for its review and purchase of Hiatt’s claimed patented Shriker chip.’ Hiatt, as part of furthering his product … falsely represented that he developed the Shriker chip and that the chip had the potential to capture and store electrical energy from lightning strikes,” the indictment reads.

Through his make-believe contracts, Hiatt convinced Teel to wire $10,000, $19,000 and $20,000 on three different occasions to a bank in Davenport. Those wire transfers were the basis of the current charges.

Frank Harrill, supervisory senior resident agent of the Spokane office of the FBI, said agents from his office investigated Hiatt but said he could not give any more information than what was contained in court records because the investigation continues.

Hiatt, who remains in federal custody, is due to appear at 3 p.m. Tuesday before Imbrogno for a bail hearing. Efforts to reach Teel Friday were unsuccessful.


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