Politics
11:20 am
Tue September 18, 2012

UPDATE: Former CEO of Mamtek arrested, faces criminal charges

UPDATE: 3:00 pm, Tuesday September 18:

Former Mamtek CEO Bruce Cole was arrested at his home in Dana Point, California on Tuesday after the Missouri Attorney General charged him with theft and fraud.

Missouri Attorney General Chris Koster told reporters that Bruce Cole -- the former CEO of the now defunct company Mamtek -- has been charged with stealing and four counts of securities fraud.

Koster alleges Cole stole at least $700,000 from the $39 million of bond money intended for the construction of Mamtek – an artificial sweetener company – in Moberly. Mamtek defaulted on its bonds in August 2011.

Koster says Cole allegedly used a $4 million invoice from a sham company called Ramwell Industrial to wire $700,000 to his wife, Nanette. She allegedly cashed a portion of that and spent it to save their Beverly Hills home from foreclosure.

When asked if there might be additional charges, Koster said the investigation will continue with the help of the Securities and Exchange Commission.

“We’ve continued to learn a lot as the civil case proceeded and a fair amount of the material information that has led to these charges was developed in cooperation with the SEC and with the bankruptcy proceedings," he said. "We anticipate that we will learn more as the process continues.”

Cole faces a number of other charges including misrepresenting his ownership of a sweetener plant in China, the hazardous chemicals involved in the manufacturing process and that it would only take four to six months to build the fully functioning facility in Moberly.

Moberly Mayor Bob Riley says Cole initially charmed the town with his promise of jobs so it was easy to get on board with him. But, in retrospect, Riley says job creation is still a top priority.

“You’re gonna find that the people around here, as well as myself, we’re always going to look at everything form the positive end because we think certain things are going to work out," he said. "In this case it didn’t but it’s not going to slow us down going for more.”

Bruce Cole’s bail was set at $500,000.

The charge of stealing is punishable by up to 15 years in prison and the charges of securities fraud carry a potential sentence of up to ten years with up to a $1 million fine on each count.

Koster said he would immediately start working with the state of California to extradite Cole.

UPDATE: 11:24am, Tuesday September 18:

Attorney General Chris Koster announced at a press conference Tuesday in Moberly that he is pressing criminal charges against Bruce Cole. Cole is the former CEO of Mamtek, a failed artificial sweetener factory in Moberly that left the town's finances in disrepair and prompted a number of investigations by the state of Missouri.

Koster also announced that Cole has been arrested at his home in California today, and will face numerous criminal charges. Among them, Koster alleges Cole wired $700,000 to his wife within days of funneling more than $4 million through a dummy company he said would provide services to Mamtek. Koster says Cole's wife then wrote a check for almost a quarter of a million dollars toward their mortgage for their Beverly Hills home to avoid a foreclosure auction.

KBIA's Kris Husted was at the press conference this morning and will have more on this story online later today, and during All Things Considered. Follow this link to read Koster's complete press release.

In it, Koster outlines the charges against Cole.

The criminal complaint filed today specifically alleges that Cole:

  • Committed stealing by deceit by appropriating at least $25,000 for his own personal use;
  • Committed securities fraud by using Ramwell as an artifice to defraud by using the name “Ramwell” to obtain bond disbursements from Mamtek U.S. when he actually planned to use the funds for other purposes, including the payment of $700,000 to Cole’s wife for personal use;
  • Represented to the issuer of the bonds that Mamtek’s manufacturing processes would neither require nor produce any hazardous substances, when Mamtek’s manufacturing processes called for the use of either triphosgene or thionyl chloride, both of which are hazardous chemicals,
  • Represented to the issuer of the bonds that Mamtek operated a fully functional sucralose production facility in China, when that plant was not, at that time, producing sucralose, and;
  • Represented to the issuer of the bonds that just four to six months would be needed to build the facility and make it fully operational, when Cole believed it would take longer to make a production facility functional in the United States.

The charge of stealing is punishable by up to 15 years in prison. The four charges of securities fraud carry a potential sentence of up to ten years imprisonment and up to a $1 million fine on each count.

ORIGINAL STORY, 9:01am, Tuesday, September 18:

Missouri Attorney General Chris Koster appears ready to announce results of an investigation into the financial collapse of a proposed artificial sweetener factory in Moberly.

Koster has scheduled a news conference Tuesday morning at the site of the failed Mamtek U.S. Inc. facility.

The announcement comes one year after Koster said his office was assisting the Randolph County prosecutor in determining if any civil or criminal laws were violated.

Construction of the plant halted last year after Mamtek was unable to make payments toward $39 million of bonds issued by the city Moberly to finance the project.

The state had offered more than $17 million worth of incentives, but nothing was paid because the deal fell apart before Mamtek could trigger the aid.