Nov. 5, 1999

Prophet of profits, promising free electricity, has fraud record

BY BILL SIZEMORE, The Virginian-Pilot 
Copyright 1999, Landmark Communications Inc.

It sounds like a dream come true: Never pay another electric bill for the rest of your life. 

Dennis Lee says he knows how to make it happen, and he's coming to the Virginia Beach Pavilion Monday to tell you how you can get on the free-energy gravy train for a modest investment of $275. 

Before signing up with Lee, however, there are a few things potential investors might want to know.
 
 

·  Scientists say Lee's free-energy concept is impossible to achieve because it violates fundamental laws of physics.
 

·  Lee has a 25-year record of brushes with the law, including a two-year prison stint for consumer fraud. Authorities in Tennessee and Washington state have moved against him during his current 45-city national tour.
 

·  A former technical adviser to Lee says he resigned in protest after Lee asked him to falsify the efficiency readings of his free-energy device.
 

·  Defectors from Lee's organization say he's a fake and a dangerously charismatic pied piper to the disaffected -- particularly evangelical Christians.
 

·  Among those who've been soured by their contact with Lee is Virginia Beach-based religious broadcaster Pat Robertson, who lost a reported $150,000 in a different Lee scheme 20 years ago.
 

 To his detractors, Lee is the Energizer Bunny of con men. After all that history, they can't believe he's still packing theaters, concert halls and arenas around the country with people ready to believe his claims -- and to trust him with their money.

 For his part, Lee says he's a misunderstood prophet -- ``God's anointed,'' he calls himself -- who was divinely inspired to break the stranglehold of the electric utilities and bring free, non-polluting, perpetual power to every American household.

 He blames his troubles on his enemies -- the power companies -- and those he sees as their minions, the government and the media.
 
 

``Please tell all of your friends,'' urges one of Lee's Internet pages. ``. . . We plan SOON to come forth with a product that can set them free of the central power grid.''

 At his free shows, the burly, bearded Lee demonstrates a variety of electronic devices and tells his listeners that for their onetime investment of $275, they will be entitled to have an electricity-generating machine installed on their homes that will supply all of their power needs for life. This device will be so efficient, he says, that he will be able to sell excess power back to the utility.

 The specific devices have changed, but the central claim of Lee's pitch has been the same for years: that a machine can be designed that produces more energy than it consumes. In other words, a perpetual motion machine.

 How can that be done? By capitalizing on the ``Fourth Law of Motion,'' Lee says -- a new one that didn't occur to Sir Isaac Newton when he propounded his famous three laws of motion in the 1600s.

 The centerpiece of Lee's current road show is something he calls a ``counter-rotational device,'' which features four motors powered by three 12-volt batteries inside a metal contraption about the size of a washing machine. The motors spin an internal disc assembly, which Lee says produces twice the energy that goes into the device.

The show is all razzle-dazzle and no substance, says Jim Murray, 52, of Piscataway, N.J., an electrical engineer who worked for Lee three years. He quit in mid-July, shortly before Lee began his current tour.

 ``It's absolute rubbish,'' Murray said. ``And it's got to be deliberate, because nobody could make that many mistakes all in a row. He asked me to participate in that fraud, which I would not do.''

 Murray said Lee's ``counter-rotational device'' is a retooled version of a gadget invented decades ago for use in electric cars.

 When the device was assembled and tested, the results were abysmal, Murray said. It tested out at about 20 percent efficiency, meaning it consumed 80 percent of the energy put into it.

 ``It was a piece of junk,'' Murray said.

 With the Sept. 18 tour kickoff just weeks away, Lee was desperate.

 ``He had his back against the wall, because he had promised people that he would be demonstrating this free-energy engine, and it was quite obvious he wasn't getting anywhere with it,'' Murray said.

 ``He called me up to his office and asked me to rig the system to make it appear 200 percent efficient instead of 20 percent,'' Murray said. ``I told him I wouldn't prostitute myself. I sent him a letter of resignation the same day.''

 Repeated attempts to reach Lee, 53, for a response to his critics were unsuccessful.

 Tom Napier, an electronics designer, attended a Lee show in Philadelphia three years ago and found scientific ignorance in abundance. 

Lee's downfall, Napier said, is the First Law of Thermodynamics.

 ``Energy cannot be created or destroyed,'' said Napier, who has degrees in physics and electronics. ``You can change its form; you can move it from place to place. But you can never create energy that isn't there in the first place.''

 Lee seems to think ``scientific laws are like acts of Congress,'' Napier said -- ``if you get a big enough lobby, you can get the law changed.''

 ``The bottom line is that there is no free energy,'' Napier said. ``No matter how ingenious you are, you never come out ahead. His whole campaign is a fraud. 

``Whether he knows that is another issue. He may just think that if he finds one more inventor with one more smart idea, he's going to find this marvelous machine. He's been looking for it for over 20 years now and hasn't come up with it yet. But he keeps on selling ideas to the public. It's always `Well, it's not quite ready yet' or `I can't demonstrate it today because something's wrong with the machine, but by the end of the year we'll be installing these machines.' And he never gets there, and he never will.''

 Eric Krieg, an electrical engineer and president of a Philadelphia skeptics' club, attended the same show as Napier and came away determined to expose Lee. He has established an Internet site that has become a rallying point for Lee's critics.

 ``My engineer friends and I had to hold ourselves back from laughing out loud at what utter nonsense he was spouting,'' Krieg said. ``But then I looked behind me and saw hundreds, maybe thousands, of people that appeared to be buying it. I saw them go down afterwards to start signing up for stuff. I said, `My gosh, this is a cult.' It was kind of an epiphany for me.''
 
 

``He's a real snake oil salesman, a good one,'' said Charlie Doyle, 36, a carpenter in Portland, Ore., who heard Lee on a radio interview in 1996 and was persuaded to sign up for his crusade.

 ``He said he'd stumbled on the idea of how to produce energy for free,'' Doyle said. ``I didn't know anything about how electricity was generated, and I wanted to know more. It was something I wanted to believe -- that there was an alternative to fossil fuels. I just kind of got sucked in through my own foolishness.''

 Doyle became one of Lee's dealers, one in what Lee says is a network of thousands of people around the country who can earn commissions by bringing new people into the program. Dealerships have been sold for as much as $100,000, according to Lee's Internet site.

 Doyle was so impressed with Lee that he signed on as a truck driver for the second half of his 1996 national tour and subsequently went to work as a stage assistant at Lee's New Jersey headquarters.

 After a few months, Doyle said, he got a clearer idea of how Lee operates.

 ``He makes these big promises, then takes in money, then goes home and prays about it and hopes like hell he can find a way to do it,'' Doyle said.

 By mid-1998, Doyle had had enough. He left Lee's organization, moved back to the West Coast and traded his $10,000 dealership to a mechanic for a $300 tuneup on his 1987 Subaru.
 
 

The local sponsor for Lee's upcoming Virginia Beach show is the Rev. Clint Ashe, pastor of Living Word Family Church in York County.

 In an interview, Ashe stressed that he is acting in his capacity as an independent dealer for Lee's company and that the event has no connection to his church.

 Ashe said he is confident that Lee's operation is on the level.

 ``I've been up there and seen the technology, seen the inner workings of what they're doing,'' he said. ``If I weren't satisfied with that, I wouldn't be doing what I'm doing. . . . It's totally revolutionary.''

 As for Lee's legal troubles, Ashe said, ``I think a lot of that was trumped up. . . . As far as I know, Dennis is trying his best to do things above board.''

 His biggest fear, Ashe said, is that the power companies will marshal their resources against Lee because he is a threat to their profits.

 ``If there's any hint of anything negative, then they would try to magnify it the best way they could, to try to negate what he's trying to do,'' he said.

 Ashe encouraged people to come and see Lee's presentation and make up their own minds. ``It sounds like it's too good to be true,'' he acknowledged. ``But it might be too good to be ignored.''

 He said that of the $275 investment Lee is asking people to make, $200 will be put in escrow and will not be touched until the free-energy machines are produced, installed and generating electricity. The remaining $75 is for administrative costs and is non-refundable.

 ``The only thing at risk for the average John Doe, for the opportunity to get free electricity for the rest of their life, is $75,'' Ashe said. ``Now that's a pretty good deal, I think.''

 Lee's dealers earn a small commission on each investment, Ashe said -- ``just enough to cover some of our paperwork and our time. Where we hope to make money in the future is when they get all these in production and start selling power.''
 
 

The current tour put on by Lee's company, Better World Technologies, has added more legal difficulties to his already long rap sheet.

 The final three shows are Saturday in Richmond, Monday in Virginia Beach and Wednesday in Philadelphia.

 When the tour passed through Tennessee in late September, the state attorney general went to court and got a temporary restraining order barring Lee from doing business in the state pending a hearing Nov. 18. The order alleges that Lee violated the Tennessee Securities Act by marketing unregistered securities and failing to disclose material facts.

 The order includes a laundry list of Lee's past legal troubles:
 
 

·  Arrested eight times between 1974 and 1979 in New Jersey on fraud, forgery and drug-related charges.
 

·  Arrested in New York in 1982 for passing bad checks.
 

·  Accused by the Washington state attorney general in a 1985 civil action of violating the state consumer protection act. Lee agreed to a stipulated judgment of $31,000, but left the state without paying the fines.
 

·  Pled guilty to seven of 47 felony criminal counts filed by the Ventura County, Calif., district attorney in 1988 for violating the state's Seller Assisted Marketing Plan law and grand theft. Lee served two years in a California state prison.
 

 When Lee hit Washington state last month, the state Department of Financial Institutions was ready with a cease-and-desist order accusing him of marketing unregistered securities and defrauding potential investors. The order labeled Lee's activities ``a clear and present danger to the investing public.''
 
 

Undeterred, Lee went on the offensive. He had his truck bypass Washington state so the authorities couldn't seize his free-energy machine. In his shows, he omitted the usual live demonstration and showed the machine on videotape instead.

 And on stage in Tacoma, Wash., Oct. 18, he tore up the state's cease-and-desist order and threw it to the floor.

 In a recorded telephone message intended for his network of dealers last month, Lee lashed out at his adversaries.

 ``The war began in Washington state,'' he said. ``I said I'd take down the electric utility companies. . . . They messed with God's anointed. God at that time said that we were going to take 'em down.''

 Lee also pledged to sue journalists who produce unfavorable reports about him and dissuade people from coming to his shows. ``We're going to get them to pay for all these empty chairs,'' he said.
 
 

Lee's critics accuse him of preying on evangelical Christians.

 ``He goes after Christians because they're gullible,'' said Doyle, the dealer-turned-defector. ``And Dennis talks the talk. He speaks in tongues.

 ``There's a certain element of society that's Christian and extremely patriotic that hates the government and feels alienated, and Dennis sees a bull's eye on them. I don't think he's trying to hurt them; I think he's trying to save them, in his own crazy way.''

 According to the cease-and-desist order issued in Washington state, Lee has pledged that 20 percent of the income his company generates by selling electricity will be used ``to restore family values in America, feed the hungry, clothe the naked, take care of widows and orphans, and to finance the restoration of a constitutional government.''

 Krieg, Lee's Internet nemesis, said Lee is targeting entire churches.

 ``Dennis has told his dealers to go to their churches and make pitches about all this free-energy stuff and to try to get the churches to put in money,'' Krieg said. ``. . . You'll see a lot of broken-spirited people from this.''

 One of the most prominent Christians ever snookered by Lee, Krieg said, was Pat Robertson.

 In 1978 in New Jersey, Lee was peddling retail discount cards that would allow consumers to get rebates on their purchases from participating merchants. Lee's company would get a cut of each rebate, and he pledged to use a portion of the profits to advance the cause of world evangelism -- an effort, Lee said then, to atone for his criminal past.

 To help finance the scheme, Lee came to Virginia Beach, met with Robertson at his Christian Broadcasting Network headquarters and persuaded the broadcaster to invest a reported $150,000.

 Less than two months later, Robertson pulled out of the deal, reportedly accusing Lee of false advertising, operating a pyramid sales scheme and unauthorized sales of securities. He wrote off the investment as a loss.

 ``It was an unpleasant experience,'' said Tom Knox, a spokesman for Robertson.
 
 

·  Reach Bill Sizemore at 446-2276 or size@pilotonline.com
 

More
 
 

·  Forum Information:
What: ''Free Energy'' Forum
When: Monday, Nov. 8.
Where: Pavilion Convention Center, 1009 19th St., Virginia Beach.
Cost: Free
 
 

·  Web link: Lee's official web site
 

·  Web link: Eric Krieg's skeptical site