The Securities and Exchange Commission issued a temporary restraining order and asset freeze on Thursday to stop what it alleges was a “fraudulent offering of securities and misappropriation of investor assets” by Denver-based Outdoor Capital Partners LLC and its director Samuel J. Mancini.
The order follows Mancini’s arrest Tuesday in a related criminal complaint that alleged securities fraud, wire fraud, and money laundering. Mancini appeared before a Denver federal court and was released on a $100,000 unsecured bond pending his initial appearance in a federal court in New Jersey.
Starting in late 2019, Outdoor Capital and Mancini, 55, raised approximately $11.5 million from at least 40 investors via the sale of memberships in an investment fund, as well as the sale of high-interest loan contracts, according to the SEC complaint unsealed Thursday.
Mancini told investors he was raising a total of $20 million and putting $5 million of his own money toward the purchase of a controlling interest in three Italian cycling-related companies. But the SEC alleges the acquisitions didn’t take place and Mancini misappropriated $400,000 of the funds and redirected at least $800,000 to other investors in “Ponzi-like payments.”
Outdoor Capital Partners didn’t inform investors about its failure to acquire the target companies, according to the complaint. When investors requested their money back, the SEC alleges that they were given fabricated documents, including fake financial statements, fake bank statements, and made-up emails from banks.
“As we allege, Mancini repeatedly lied to investors, sent investors falsified bank documents, and misappropriated investor funds,” said Kurt L. Gottschall, director of the SEC’s Denver Regional Office, in a news release. “The SEC has significant expertise in rooting out investment fraud by tracing the uses of investor funds even where, as we allege happened here, some funds were transferred to foreign accounts.”
The SEC is seeking emergency relief as well as permanent injunctions and the return of “ill-gotten gains” with interest and civil penalties, according to the complaint, which was filed in the U.S. District Court for the District of New Jersey. It also has requested Mancini be barred from serving as an officer or director and wants the return of money it alleges was paid to Italia Fund LLC, OCPITALUS LLC, and Mancini’s wife.
The criminal count of securities fraud, the most severe of the three the DOJ is seeking, carries a maximum penalty of 20 years in prison and a $5 million penalty.
Mancini garnered headlines in 2014 and 2015 after the shelves of the Bella Market stores he owned went bare in several rural Colorado towns, forcing residents to drive long distances to obtain basic items. He also defaulted on the loan extended to him by the prior owner of the chain of stores and left vendors unpaid.
Mancini didn’t provide a response to the complaints prior to publication.
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