Mamtek consultant to pay $100K settlement in lawsuit

COLUMBIA, Mo. (AP) — A business consultant who helped sell Missouri on a sweetener manufacturing company's project will pay $100,000 to settle bankruptcy court claims that he participated in a scheme to divert millions of construction funds to company insiders. The Columbia Daily Tribune (...

COLUMBIA, Mo. (AP) — A business consultant who helped sell Missouri on a sweetener manufacturing company's project will pay $100,000 to settle bankruptcy court claims that he participated in a scheme to divert millions of construction funds to company insiders.

The Columbia Daily Tribune (http://bit.ly/25mpzgq ) reports that U.S. Bankruptcy Judge Dennis Dow approved the settlement with Tom Smith on Friday. Smith was sued by bankruptcy trustee Bruce Strauss in 2011 for $39 million for the amount the city of Moberly borrowed to build the factory, plus nearly $800,000 paid to the company, Mamtek U.S. Inc., as project manager.

The settlement comes after Smith threatened to file bankruptcy if the suit was taken to trial, according to a brief written by attorney Victor Weber. Weber said the agreement means that the bankruptcy case is nearing its conclusion.

Smith was operating a firm called Capital Business Development Associates out of Virginia in January 2010 when he first promoted Mamtek to the Missouri Department of Economic Development for a commercial sweetener plant.

In July of that year, Gov. Jay Nixon and Mamtek founder Bruce Cole announced that Moberly would issue industrial development bonds to finance the plant and that the state would give $17.6 million in tax credits and other incentives.

Construction on the project stopped in 2011 when the bond funds were depleted.

An investigation by the newspaper showed that $6.6 million of the bond proceeds were paid on fraudulent invoices from a nonexistent company. Cole is serving a seven-year prison sentence for securities fraud and theft.

Smith retired in 2005 after career in the Army and National Guard for more than 30 years.

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Information from: Columbia Daily Tribune, http://www.columbiatribune.com

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