CHICAGO — An auction is set for next month of the assets of the bond-financed, half-built artificial sweetener plant in Moberly, Missouri that was abandoned by its developer last year.

Local and state prosecutors and federal regulators filed complaints alleging theft, fraud and securities violations against Bruce Cole, the former chief executive officer of the company Mamtek US Inc. on Tuesday.

Moberly handed control of the shuttered project over to trustee UMB Bank NA after the company failed to make payments needed to cover debt service on $439 million of revenue bonds last year and the city in turn reneged on its appropriation pledge to cover debt service. The bonds were sold in 2010 through the city’s economic development authority to help finance a sucralose manufacturing plant being built by a subsidiary of the Chinese company Mamtek International.

UMB reported to bondholders in a notice this summer that it had failed in its efforts to find a new company to step in and take over construction and that it planned to auction the assets for the benefit of bondholders and other creditors and to help cover UMB’s expenses in the company’s involuntary bankruptcy case filed by UMB and other creditors.

Heritage Global Partners will hold an auction on Oct. 24 between 10 AM and 1 PM Pacific Time of the “manufacturing facility, never-used equipment, commercial real estate, and related assets of Mamtek US, Inc.,” the company announced in a statement this week. The sale is being conducted in partnership with Aaron Equipment Company, BidSpotter.com and Zimmer Real Estate Services.

The assets can be purchased in bulk or individually. “We expect our upcoming auction of Mamtek’s brand new manufacturing assets and state-of-the-industry sucralose manufacturing facility to draw in a significant number of worldwide buyers,” said George Wandachowicz, vice president at Heritage Global Partners.

The assets can be viewed at http://www.hgpauction.com/?auctionid=263.

The city earlier this summer had expressed disappointment in the trustee’s decision to give up on finding a buyer that would continue construction.

Missouri Attorney General Chris Koster and Randolph County Prosecuting Attorney Mike Fusselman announced their criminal complaint alleging four counts of securities fraud and one count of stealing against Cole Tuesday.

The Securities and Exchange Commission, also on Tuesday, filed a civil complaint against Cole charging him with a scheme to defraud the city and investors and making material omissions and misrepresentations in connection with the bond issue in violation of federal securities laws. The lawsuit also names his wife, Nanette.

The complaints accuse Cole of pocketing some of the proceeds to stave off the foreclosure of his Beverly Hills home and lying to city and investors about the nature, timing and viability of the project. Cole faces both fines and possible jail time if convicted. He could not be reached for comment.

UMB has opted not to draw from reserves for recent debt service payments in order to preserve funds for the bankruptcy and other expenses. Standard & Poor’s in March downgraded to D its rating on the issue. The city lost its investment grade rating for its decision not to honor its appropriation pledge.

Bondholders’ ultimate recovery remains unclear as bankruptcy trustee Bruce Strauss is also analyzing possible claims against former Mamtek officers. Strauss has already filed a lawsuit against Cole and his wife for breach of fiduciary duty.

An investor earlier this year filed a lawsuit against the bonds’ underwriter Morgan Keegan & Co. and underwriter’s counsel Armstrong Teasdale LLP, accusing them of providing false and misleading information in the offering statement. The firms deny the charges and said they will vigorously challenge them. Bonds have traded most recently at 18 cents to 19 cents on the dollar.

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