Posted: Sep 2, 2014 3:25 PM by Lee Anne Denyer, KOMU 8 Reporter
Updated: Sep 2, 2014 11:03 PM
MOBERLY - The man charged with wrongfully receiving millions in municipal bonds from the City of Moberly pleaded guilty to felony stealing and fraud Tuesday.
Former Mamtek U.S. Inc CEO and chairman Bruce Cole appeared in a St. Charles courtroom Tuesday afternoon. Missouri Attorney General Chris Koster attended the hearing and said at a press conference Cole would be sentenced to 5 to 7 years in prison for his actions with the company. Koster called it a "steep" sentence.
Police arrested Cole in September, 2012 in Orange County, California. In 2010, Cole promised his artificial sweetener plant would bring 600 jobs to mid-Missouri and new revenue to Moberly. A joint investigation by the Attorney General's office and Randolph County Prosecuting Attorney Mike Fusselman revealed Cole used $700,000 of financing for personal use, including making mortgage payments on his Beverley Hills home.
"Cole deceived the city and he deceived his investors," Koster said.
Koster said the investigation also revealed Cole created a fake company to hide his embezzlement, and he deliberately lied about the time line the facility would need to start operation and receiving revenue.
"By overstating Mamtek's abilities and concealing the projects true risk, Cole's acceptance of millions in investment dollars and the authority to collect tax credits amounted to stealing," Koster said.
Koster added that Cole's action took financing away from legitimate projects in the area. The city of Moberly is still working to recover from the issued bonds.
"The perfect resolution of the case would have been to get the 39 million dollars back for investors. That was not possible. The money was squandered in dozens and dozens of different avenues and the bankruptcy court is now looking at those issues. The 5 to 7 year sentence is the appropriate resolution to an important case here in Mid-Missouri," Koster said.
The Attorney General said Cole's crimes are a reminder to municipal governments involved in economic development issues that processes need to be in place to ensure they are not being taken advantage of. The city of Moberly is working to implement these types of polices.
City Manager Andrew Morris said the city council will hear proposals to implement debt management, economic development and due diligence policies. Morris said city leadership is working to restore the city's credit score, which dropped from an "A" to a "B" rating follow the Mamtek bond dispersal.
"It's not over yet," Morris said. "All we can do is to continue to watch our expenditures and undertake those steps, and we're going to continue to do that and council's been very, very supportive of that."
MFA Oil announced in December 2013 the company would purchase the vacant property. Tom May, spokesperson for MFA Oil, said he doesn't have an estimate as to the number of jobs the new facility will create, but that some operations will move from Columbia to Moberly. May said construction will begin this fall and take approximately 18 months to complete.
Cole is scheduled for sentencing November 3.