Sam Mancini arrested and charged with securities fraud
In early July, Samuel Mancini, a little-known Denver fund manager and USA Cycling collegiate committee member with ties to the cycling industry, controlled $ 11 million in investment funds earmarked for the acquisition of three Italian bicycle brands: From Rosa bicycles, helmet company Limar, and legacy clothing store From Marchi.
The three boutique brands represent a set of 178 years of Italian cycling history, but were relatively cheap to acquire, valued at between $ 1.2 million and $ 11.2 million. Mancini’s fund, Outdoor Capital Partners (OCP), was established in 2019 with the explicit purpose of acquiring the brands and helping them sell products directly to U.S. consumers.
But on July 20, Mancini was arrested for securities fraud, wire fraud and money laundering– charges punishable by maximum penalties of 10 to 20 years each. In addition, the SEC filed temporary restraining order and assets freeze separate Mancini from investor assets at OCP.
He has since retained the services of Denver trial attorney Laura Menninger, recently known for defending Jeffrey Epstein’s partner Ghislaine Maxwell.
According to the SEC and the FBI, Mancini never acquired the bicycle companies. Instead, he kept some of his investors’ money; gave some to his wife, Diana, who is also accused in the SEC lawsuit; and made “Ponzi-type” payments to other investors.
We don’t know much about the victims of the Mancini fraud; according to court documents, some investors contributed $ 100,000 while one investor contributed $ 5 million to the fund in March. In total, at least 40 people had money in OCP.
Outdoor Capital Partners’ influence spanned the Atlantic Ocean, employing American executives in the bicycle industry and bringing former Italian companies to the negotiating table. So where did it all go wrong? Here we break down what we know.
Who is Samuel Mancini?
By its LinkedIn page and Outdoor Capital Partners biography, Mancini, 55, received an MBA from the University of Denver in 2004 and bought a group of Colorado grocery stores in 2006. Years later, the Denver Post reported in 2014, Mancini defaulted on loans, stiffened vendors and left store shelves empty, forcing locals to travel to Wyoming to stock up.
He is also an avid cyclist. Prior to his arrest, Mancini was a member of the USA Cycling Collegiate Committee and a driver for Audi Denver in 2012 and 2014, according to Road-Results. In a 2019 application To join the college committee, Mancini said he started racing on a bicycle while attending the United States Military Academy at West Point and has since competed on roads and dirt.
Court documents indicate that investors contributed to his fund in part on the basis of his prestigious education, and the former mayor of Wellington, Colorado, said to Denver Post which Mancini led with his status as a West Point alumnus when they first met.
His investors would eventually find out that Mancini had been kicked out of West Point for “unethical conduct,” according to the SEC. A representative from USA Cycling said Mancini resigned from his post on the college committee after his arrest was announced.
From his Twitter action, Mancini is pro-troops, pro-vax, anti-critical racial theory and a fan of West Point athletics. It follows the biggest names in US politics and professional cycling, and is mostly followed by paid digital marketing bots.
What is Outdoor Capital Partners?
Outdoor Capital Partners (OCP) is a Denver-based private equity fund incorporated on August 28, 2019, with an office in the Cherry Creek neighborhood of Denver.
Its stated goal was to acquire three Italian bicycle brands – De Rosa, Limar and De Marchi – and revitalize them as direct-to-consumer behemoths like Canyon. In return, investors would get 70 to 75 percent of operating profits, an expected net return of 40 to 45 percent.
Mancini would need $ 20 million to acquire the brands and told investors he was injecting $ 5 million of his own money. Court documents say the deal valued De Rosa at $ 11.2 million, Limar at $ 3.7 million and 70% of De Marchi at $ 1.2 million.
Within four days of its incorporation, Andrew Herrick left a position on the board of directors of Kitsbow, a cycling clothing brand, and became Managing Director. This position is just the latest in a series of senior positions in the bicycle industry, including CEO positions at Intense, a mountain bike manufacturer, and Crank Bros, a components company; a post of vice-president at GT Bicycles around the millennium; and co-founder of the brand of tools and accessories Pedros in 1989.
Herrick was indeed identified in the criminal complaint as a “co-conspirator,” but he was not involved in the fraud.
The fund also hired Michelle VanGilder, the former director of purchasing for Felt bikes, and Eric Horton, previously Creative Director of Giro. VanGilder left OCP in June to work at Rossignol. Horton’s LinkedIn says he left OCP in July; he continues to run an automotive-inspired sock business.
Neither Mancini, nor Herrick, Horton or VanGilder answered questions from Bicycling about their time at the fund. But, a hint: at the end of 2019, Instagram photos show Herrick and Horton in Italy meeting Ugo De Rosa, the founder of De Rosa.
âMyself and my colleagues at our new company have had the honor of knowing one of the true artisans and legends of our industry,â Herrick wrote in the caption of an Instagram portrait from him and De Rosa. âUgo De Rosa. Signor Chairman.
Where did it go wrong?
In November 2019, when OCP publicly announced its intention to acquire De Rosa, the bicycle company was about to announce its sponsorship of Cofidis, a UCI Pro Conti team that was riding the World Tour that year. Despite the fraud, the sponsorship has passed: Cofidis rides today on De Rosa bikes.
“The investment capital and management skills that Outdoor Capital brings to De Rosa marks a new stage in the company’s development”, Ugo De Rosa told Capo Velo.
At the time, Ugo De Rosa told Capo Velo that everything was fine, saying that “the investment capital and management skills that Outdoor Capital brings to De Rosa marks a new stage in the company’s development. “.
In a February 2021 interview with Cycling NFRHorton said he was working directly for Limar helmets, which had adopted the direct-to-consumer model on which Mancini had sold investors. Limar also sponsored Astana – Premier Tech, a WorldTour cycling team. At surface level, everything looked fine.
It was not. Apparently unbeknownst to Horton, who Recount A bicycle retailer, he was “devastated” by allegations his company did not own any part of Limar.
According to the SEC, Mancini also lied to investors from the start. Shortly after incorporating the fund, Mancini told investors he was closing himself off to new entrants with more than $ 18 million in investors. In fact, Mancini had raised $ 3.1 million.
A 2020 year-end balance sheet was also bogus, showing investor assets totaling $ 13.6 million. By that time he had raised less than $ 5 million. From 2019 to 2021, the SEC alleges that Mancini continually lied to investors, forging bank statements when in a rush to know the status of acquisitions.
De Marchi’s purchase deal collapsed mid to late 2020, with Mancini telling investors that De Marchi tripled its price in exchange for 100% ownership, which Mancini said he said. wouldn’t.
De Marchi CEO Mauro Coccia reiterated this differently in a recent interview with Bicycle Retailer saying he never changed the terms – Mancini just never sent the money.
In place of the De Marchi agreement, an attempt was made to acquire Gruppo SRL, the parent company of Columbus tubes and Cinelli bikes, for $ 4.2 million. Instead, Gruppo SRL was acquired by an Austin investment firm in July.
None of the initial acquisition targets responded to Bicycling’s questions about proposed sales and company valuations; a representative of Gruppo SRL declined to comment.
What is happening now?
Mancini was released on $ 100,000 bail. In addition to the potential jail time, Mancini could be forced to reimburse investors and banned from trading in securities or managing a publicly traded company.
Despite the unsuccessful acquisition, De Rosa sells direct to consumers in the United States anyway through a North American sporting goods distributor. Logica Sport.
Outdoor Capital Partners, which is registered in Herrick’s name, became a delinquent corporation on January 1, 2021 for failing to file an annual report with the Colorado Secretary of State. Among other penalties, OCP’s name will be available to others by early 2022, if anyone was so inclined to name their Colorado company after a Ponzi scheme.
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