As he sold investors on an improbable plan for turning Inland Empire cow manure into electricity, W. Patrick Moriarty had an answer for everything.
With a folksy delivery, the Orange County businessman promised cutting-edge technology, a respected engineering firm and tax-exempt financing to extract methane gas from mountains of manure and use it to generate enough power to light a small city.
"He told me categorically that we would get our money back with interest and that the project was as good as gold," said Shmuel Erde, a Beverly Hills lender.
What Moriarty and his business partner, Wayne Stephens, didn't tell Erde and numerous others who altogether invested more than $10 million was that their company, Chino Organic Power Inc., had no licensed technology, no equipment, no permits -- not even a guaranteed supply of manure.
Although manure-to-electricity plants have been used on a small scale to turn water-polluting cow waste into power, they are not particularly cost-effective and have never produced close to the amount of electricity Moriarty envisioned, documents and interviews show.
Another thing Moriarty didn't tell Erde and the others was that he had gone to prison in the 1980s in what then-U.S. Atty. Robert C. Bonner called "the most significant corruption case in recent California history."
Not surprisingly, the lofty energy plan has come crashing down, followed by a bankruptcy and accusations from angry investors, a number of whom have filed lawsuits alleging fraud by Moriarty and Stephens, a San Bernardino County businessman.
In interviews with 20 investors, many said they now believe the entire operation was a ruse to enrich the two.
A Times review of permit applications, court records and corporate documents shows that the Chino Organic Power plant never progressed much further than the sales pitch.
Both Moriarty and Stephens have acknowledged in recent interviews that their plan never got off the drawing board. But they said they didn't defraud anyone, and they insisted that the electric plant would have worked if it hadn't been hampered by an uncertain energy market and litigious investors.
"I am absolutely very sorry if anyone, including me and Wayne, lost money -- especially me," said Moriarty, 75.
Moriarty grew up in Washington state and moved to Orange County in the 1950s to expand a fireworks business he had started as a teenager. By the 1980s, Moriarty and his associates contributed nearly $600,000 to California politicians, about half of it illegally laundered to mask the source of the funds.
