CHICAGO – Missouri Attorney General Chris Koster and local prosecutors announced the filing of criminal charges Tuesday against the former chief executive officer of Mamtek US., the company that abandoned its half-built, bond-financed plant in Moberly.
The complaint alleging theft and four counts of securities fraud against Bruce Cole were announced by Koster and Randolph County Prosecuting Attorney Mike Fusselman.
The charges mark the latest turn of events in the saga over the failed plant financed with $39 million of appropriation revenue bonds issued by Moberly’s economic development authority in 2010.
The company last year defaulted on payments owed to the city and abandoned the plant. The city’s failure to make good on its appropriation pledge led to its loss of an investment grade rating and a bondholder lawsuit. The trustee UMB NA has plans to auction off the project assets this fall.
“The failure of the $39 million investment in Moberly was a tragedy for that community,” Koster said at a news conference. “Today, we have alleged that Mr. Cole deceived the city and the investors about the project and unlawfully profited from the investment by taking at least $700,000 from the bond money for his own personal use.”
Cole is also accused of failing to disclose important facts in an effort to secure financing for the project. If found guilty, the charge of stealing carries a sentence of up to 15 years in prison. The four charges of securities fraud carry a sentence of up to 10 years in prison and an up to $1 million fine on each count.
Koster acknowledged the assistance of the Securities and Exchange Commission on the investigation of the case. The trustee has previously disclosed that the SEC is investigating the project.