Tur­bine pro­moter fac­ing U.S. charges

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James Alan Rowan seemed to have a win­ner with his lat­est in­no­va­tion, a wind tur­bine for the home that didn’t need a tower.

Celebri­ties like for­mer Tonight Show host Jay Leno and ac­tor Ed Be­g­ley Jr. en­dorsed the Cana­dian en­tre­pre­neur’s prod­uct. Rowan was mak­ing na­tional head­lines with his in­ven­tion. But skep­tics won­dered if it ac­tu­ally worked.

Even­tu­ally, fame turned into no­to­ri­ety. In Oc­to­ber 2013, a grand jury in­dicted Rowan for wire and se­cu­ri­ties fraud in North Carolina. After four years in hid­ing, Rowan was lo­cated in Saska­toon in 2016. The al­le­ga­tions against him have not been proven in court.

Ul­ti­mately, it was one of Rowan’s for­mer as­so­ciates who lo­cated him.

In 2013, Heiner Philipp was driv­ing through an On­tario ice storm, watch­ing power trans­form­ers ex­plode and wires and trees crash down. His plan was to serve Rowan with civil suit doc­u­ments at his home in Fonthill, Ont.

The suit was filed by share­hold­ers of one of Rowan’s suc­cess­ful ven­tures, OilSteam. It al­leged, among other things, that he shared OilSteam’s in­tel­lec­tual prop­erty with­out au­tho­riza­tion. Philipp said Rowan’s al­leged ac­tiv­ity with En­viro-En­er­gies, which is at the heart of a loom­ing crim­i­nal prose­cu­tion in the U.S., dam­aged OilSteam’s rep­u­ta­tion to the point where it couldn’t go for­ward.

Philipp said Rowan’s house looked aban­doned, the win­dows cov­ered with card­board. He was park­ing his ve­hi­cle at a nearby church and us­ing a hole in a fence to get to his house. He stayed in his base­ment in the dark.

Philipp opened the base­ment win­dow, pushed the drapes aside and said ‘Con­sider your­self served,’” Philipp re­called in a phone in­ter­view.

Last spring, Saska­toon Court of Queen’s Bench ruled that Rowan be ex­tra­dited to the United States to be tried on one count of wire fraud and one count of se­cu­ri­ties fraud in con­nec­tion to the Mag Wind tur­bines mar­keted by En­viro-En­er­gies. Rowan has ap­pealed the ex­tra­di­tion rul­ing. The Saskatchewan Court of Ap­peal has set a hear­ing date for May 11.

The FBI al­leges that Rowan ag­gres­sively mar­keted the wind tur­bine tech­nol­ogy in per­son and online and that it was en­dorsed by celebri­ties. Mar­ket­ing ma­te­ri­als said the tur­bines didn’t need tow­ers.

The grand jury that in­dicted Rowan in 2013 al­leged he ex­ag­ger­ated the “power gen­er­a­tion ca­pac­ity, fal­si­fy­ing sci­en­tific and tech­ni­cal data, and fal­si­fy­ing in­for­ma­tion re­gard­ing his ca­pac­ity to man­u­fac­ture and dis­trib­ute the Mag-Wind tur­bines.”

Ac­cord­ing to an RCMP af­fi­davit, Rowan had a valid Saskatchewan driver’s li­cence list­ing his par­ents’ home as his ad­dress. Through a Pri­vacy Act re­quest, the RCMP learned that Rowan worked as a Statis­tics Canada field in­ter­viewer for a time while he was wanted by the FBI.

Philipp said he was in­tro­duced to Rowan one win­ter through a fi­nan­cial ser­vices com­pany that had loaned money to En­viro-En­er­gies. The lender men­tioned that En­viro-En­er­gies was hav­ing en­gi­neer­ing prob­lems and rec­om­mended he step in to help, Philipp said.

He works with ma­jor com­pa­nies like Toy­ota, Honda, Gen­eral Mo­tors, Chrysler and WestJet. But he also en­joys work­ing with dream­ers, he said, charg­ing them lower rates or of­fer­ing his ser­vices for free.

Philipp said he signed on to de­sign the me­chan­i­cal el­e­ments of the tur­bine’s sys­tem and man­u­fac­ture up to five pro­to­types. Each of the pro­to­type tur­bines cost $12,500, which Philipp says he paid for. He was to be re­im­bursed “when the money was there,” he said. But the money would never come.

A hint that some­thing was wrong came after Philipp built the first pro­to­type but couldn’t test it.

“There was al­ways a rea­son why we couldn’t. They don’t have a wire, they don’t have a crane, they don’t have an in­verter.”

One po­ten­tial buyer in Florida wanted to have the tur­bines hurricane tested. Philipp said En­viro-En­er­gies went to In­tertek in Van­cou­ver, where the firm has a “big plane en­gine,” to con­duct hurricane test­ing.

Philipp de­cided to see how much power the unit would pro­duce. It fell 90 per cent short of its stated out­put at wind speeds of 40 kilo­me­tres per hour, but could pro­duce sub­stan­tial power at 200 km/ h, hurricane wind speeds.

When Philipp con­fronted Rowan, he said Rowan told him they needed to look into why the unit’s sails weren’t work­ing prop­erly and that there must have been a change — but the unit used in the test was the ex­act same form and shape as be­fore.

Philipp con­tacted Roush En­ter­prises/PAS Inc., the firm he was told de­signed the tur­bine sails. He said the per­son he spoke to at Roush told him their en­gi­neers had told Rowan the de­sign didn’t and couldn’t work and even showed him a Pow­er­Point pre­sen­ta­tion ex­plain­ing why it wouldn’t work.

“They were very aware that it would never work and they made James Rowan aware of that fact,” Philipp said.

Philipp said he helped the FBI with its in­ves­ti­ga­tion into Rowan and his ven­ture after one North Carolina in­vestor’s com­plaint to au­thor­i­ties failed to gain trac­tion.

A spokesper­son for Roush de­clined to com­ment.

In­vestor Richard Hol­lo­man de­scribed Rowan as con­vinc­ing and hum­ble. Hol­lo­man paid hun­dreds of thou­sands of dol­lars to Rowan al­most a decade ago for stock cer­tifi­cates he didn’t re­ceive.

“I’d like to get my money back, but I’m be­yond think­ing that is pos­si­ble,” he said via tele­phone from North Carolina.

Hol­lo­man and a busi­ness part­ner were look­ing at build­ing a wind farm along the coast of North Carolina. Smaller tur­bines seemed to be the an­swer to en­vi­ron­men­tal im­pli­ca­tions.

Be­fore he met Rowan, Hol­lo­man said he learned about the MagWind tur­bine that had been built for Leno, lend­ing cred­i­bil­ity to the prod­uct.

Hol­lo­man said he told in­ves­ti­ga­tors he sent a wire trans­fer of funds to a Cana­dian bank ac­count as des­ig­nated by Rowan in Oc­to­ber, 2008. But Hol­lo­man said Rowan could never demon­strate the tur­bine pro­duc­ing en­ergy. He said Rowan ex­pressed no doubt about how well the tur­bines would work but Hol­lo­man and oth­ers hadn’t ver­i­fied Rowan’s num­bers with some­one who was us­ing a unit.

Hol­lo­man built the tur­bines ac­cord­ing to Rowan’s tech­nol­ogy and tried to see if it would work. When Rowan made a trip to North Carolina, Hol­lo­man and two other in­vestors con­fronted him, telling him what he was do­ing was a fraud.

“And he just got bel­liger­ent and all mad and ev­ery­thing else,” Hol­lo­man said. “That was the last time we ever spoke to him.”

Later, at a Las Ve­gas Home­builder’s Con­ven­tion, he saw Rowan speak­ing to po­ten­tial dis­trib­u­tors. In fact, Rowan’s booth was one of the most vis­ited ex­hibits at the event, he said.

“I think he had con­vinced him­self he wasn’t a fraud. He was so good at it he had to be­lieve what he was do­ing was right.”

At that point, Hol­lo­man just wanted to move on — de­spite los­ing a “sub­stan­tial” amount of money.

Six or eight months later, when he learned that Rowan was still seek­ing in­vest­ments from other peo­ple, he went to the FBI. Hol­lo­man said he doc­u­mented ev­ery con­ver­sa­tion he had with Rowan and kept notes. He turned this in­for­ma­tion over to the FBI. He said he’s will­ing to tes­tify if asked.

“I’d like to see jus­tice brought to the sit­u­a­tion,” he said. The wind farm idea that led him to Rowan has been aban­doned.

Philipp, mean­while, said he will travel to the U.S. at his own ex­pense and at­tend court. He wants to warn po­ten­tial in­vestors to be cau­tious when pick­ing projects.

“The big­gest tragedy of the En­viro-En­er­gies catas­tro­phe ... (was) it could have been a very suc­cess­ful en­ergy com­pany, ex­cept that Mr. Rowan didn’t treat it as a real busi­ness en­tity. It was sim­ply a skim for him,” Philipp said.

“Be­cause he had the en­gi­neer­ing, he had the fi­nanc­ing, he had the dis­tri­bu­tion and the mar­ket­ing, he had ev­ery­thing and had he not lied about the per­for­mance of his sails that he liked so much that didn’t work at all, we would have within a mat­ter of days or weeks de­vel­oped new sails.”

Philipp said he ended up de­vel­op­ing new sails for the unit that were close to 38 to 40 per cent ef­fi­cient. But he said no one wanted to con­tinue with the project be­cause mil­lions of dol­lars had al­ready been lost.

“But he had all the in­gre­di­ents to build a suc­cess­ful op­er­a­tion.”

The StarPhoenix re­quested an in­ter­view with Rowan through his lawyer. Rowan has com­mit­ted to an in­ter­view, which is sched­uled for early April.

A grand jury in­dicted James Alan Rowan for wire and se­cu­ri­ties fraud in North Carolina in 2013.

A screen cap­ture from an Arc En­ergy video which the com­pany says shows the in­stal­la­tion of an En­viro-En­er­gies wind tur­bine on the garage of for­mer Tonight Show host Jay Leno, pic­tured above.

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