OKLAHOMA CITY – A Chickasha man and two companies he controlled sold more than $2 million in unregistered securities to investors in an allegedly fraudulent scheme: a machine that he claimed uses gravity “and no other input … to perpetually generate useful electrical power…”
Stacy Wayne Travis “perpetrated a fraud” in connection with the offer and sale of securities in violation of state law, Oklahoma Department of Securities Administrator Irving L. Faught alleged in a petition for a permanent restraining order and court-ordered restitution.
Investors thought their funds would be used for legitimate business expenses, but an analysis showed that much of the money financed Travis’ personal expenses.
The case was filed in July 2018 in Oklahoma County District Court. In November 2021 District Judge Richard Ogden ruled for the Securities Department and authorized a claims process to determine the number of investors and the amount of restitution each should receive.
The Securities Department submitted a list of 161 individuals and companies that collectively invested $2.25 million with Travis, HydroEnergy Revolution and/or Zydro Energy during at least a six-year period, 2010-15.
The investors were from Oklahoma, Texas, Arkansas, Kansas, Missouri, California, Hawaii, Montana, Tennessee, North Carolina, Idaho, Georgia, Indiana, Arizona, Connecticut, Alabama, Florida and Virginia, plus a church and three individuals in New Zealand.
Oklahoma investors included residents of Lawton, Cement, Duncan, Anadarko, Chickasha, Ninnekah, Bradley, Amber, Lindsay, Weatherford, Edmond, Bixby, Owasso, McAlester, Oklahoma City, Blanchard, Mustang, Yukon and Chandler.
Every investor was sent a restitution selection form, and ultimately 29 individuals and companies opted for restitution totaling $269,767, a court document reflects. Of the other 132 forms, 44 were returned to the department as undeliverable and none of the other 88 forms was returned, according to Meleia Williamson, the department’s director of external communications.
Judge Ogden recently ordered Travis to reimburse the investors who responded to the restitution selection form, and to provide the court with proof of completed restitution payments by mid-November.
According to the Oklahoma Department of Securities, Travis sold “membership certificates” confirming that each investor held a percentage interest in Hydro and/or Zydro. Investors were to receive a percentage of profits derived from the Travis ‘invention’.
Travis persuaded two other men, one from Texas and the other from Montana, to sell membership certificates on behalf of Travis, Hydro and Zydro, according to the securities complaint.
Potential investors were told that an Oklahoma-licensed professional mechanical engineer had “confirmed” the invention; that Travis “achieved complete success with his efforts to ‘produce a free energy machine’”; the so-called invention was making “excess energy” and was “functioning just as it was designed”; and his invention was “not at risk of not working”.
Those claims were “untrue,” the Securities Department charged.
Travis also told his investors that he was the sole owner of the ‘invention’, but in 2009 he testified in a deposition that he owned just 10% of it.
Investors in the scheme believed their funds would be used to build prototypes; conduct research; pay salaries, attorneys and experts; secure patents and pay for other activities related to development of the ‘invention’, Faught wrote in the lawsuit.
Instead, 42% of investor funds – more than $1,049,000 – were “directly used for Travis’ personal expenses,” including vacations and gifts. In addition, approximately $314,000 of investor funds were withdrawn as cash, “making that money impossible to trace,” the Securities Department reported.
The funds directly attributed to Travis’ personal expenses, combined with the cash withdrawals, totaled approximately $1,364,000, or 54% of investor funds.