Samuel J. Mancini, the managing director of Outdoor Capital Partners (OCP) — a Denver-based fund set to invest in a group of cycling companies — has been arrested and charged with securities fraud, money laundering and wire fraud. He was released on $100,000 bail, awaiting his first appearance at the US District Court in New Jersey.
While none of its intended acquisitions have been successful, OCP was set to invest in three speciality cycling brands: De Rosa, De Marchi and Limar. According to certain court documents, as reported by Bicycle Retailer, OCP intended to relaunch the three Italian brands with a direct-to-consumer business model targeted mainly at the US. This would have made it a key competitor to Canyon within the consumer-direct space for road bikes.
Civil and criminal complaints attest that OCP raised more than $11 million from around 40 investors to make the acquisition. When it failed to acquire De Marchi, it set its sights on Gruppo SRL, the parent company of both Cinelli and Columbus.
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Allegedly, Mancini and his company embezzled approximately $400,000 of investors’ money, and made $800,000 in “Ponzi-like” payments to investors.
A civil complaint was filed against Mancini and OCP last week by the US Securities and Exchange Commission (SEC), which led to a freeze on their accounts. This was followed by a criminal complaint filed by the US Attorney's Office for New Jersey.
The civil case raised by the SEC could lead to Mancini being barred from serving as an officer of a public company or selling securities in future, as well as having to pay back funds, penalties and interests. Mancini could also be facing up to 30 years in prison if found guilty of all three charges.
According to investor communications contained in court files, OCP was planning to pay €9.5m for De Rosa, €3.2m for Limar, and €3.6m for Gruppo SRL. In addition to this OCP had agreed to purchase a 70 per cent share in De Marchi, costing €1m.
Speaking to Bicycle Retailer, Mauro Coccia, CEO of De Marchi said that Mancini “didn’t execute the wire transfer”, so the sale never went through.
Mancini has been accused of misleading investors and misusing funds on several counts. Accusations include, according to the court documents, lying about being an alumnus of the West Point Military Academy, and lying about investing millions of his own dollars into the fund.
So far Mancini has not made any comment to Bicycle Retailer.
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