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Alleged multi-million dollar ponzi scheme targeted purchase of De Rosa and Limar

Multiple well-regarded Italian cycling brands were unwittingly ensnared in a securities fraud involving a US investment fund.

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Three well-respected Italian brands – De Rosa bikes, Limar helmets, and De Marchi apparel – were targeted for purchase in a multi-million dollar Ponzi-style scheme, the federal government alleges in separate criminal and civil proceedings.

The three brands were independently in negotiations with Outdoor Capital Partners (OCP), a Denver-based investment fund active in the cycling industry. The SEC and U.S. Attorney’s Office for New Jersey allege that the fund’s managing director, Sam Mancini, “orchestrated an investment fraud scheme and fraudulently obtained more than approximately $10 million from victims.” 

What happened?

This alleged scheme, spanning from at least February 2020 until July 2021, misappropriated investor funds on the pretense that OCP would acquire the Italian brands at a planned cost of €3.2 million euros (US$3.7 million) for Limar, and €9.5 million euros (US$11.2 million) for De Rosa.

After OCP failed to agree to terms to acquire De Marchi at a cost of €3.5 million euros – ”[Mancini] didn’t execute the wire transfer,” De Marchi CEO Mauro Coccia told Bicycle Retailer & Industry News – the company set its sights on other prestigious Italian brands, entering into discussions to acquire Gruppo SRL, the parent company of Cinelli and Columbus. 

OCP’s stated plan to investors was to market De Rosa, Limar, and De Marchi on a direct-to-consumer basis, focusing on US sales.

De Rosa is represented in the WorldTour as the bike sponsor of the French team, Cofidis. Here’s Guillaume Martin on the attack in stage 14 of the 2021 Tour de France.

None of the acquisitions were ever completed. CyclingTips does not suggest that there was any wrongdoing on the part of any of the brands.

“By acquiring a specialty bike company, a high-margin helmet company and a design savvy Italian clothing company [De Marchi], OCP can leverage its marketing, analytics and logistics expertise without compromising the individual brands,” a 2020 executive summary from OCP said, also claiming that De Rosa would become “the only real alternative to Canyon (a €400m German Company) in the Road Bicycle DTC space.”

A pattern of deception

In an increasingly elaborate sequence of deceptions, according to the government, Mancini forged bank statements on numerous occasions to deflect questions from investors in the fund. 

Mancini also falsely told investors that their funds would be used to purchase stock from Limar, with the money instead either funnelled off to Mancini and his wife – a co-defendant in the SEC case – or to make “Ponzi-like” payments to other investors.

Limar is the helmet sponsor of Astana-Premier Tech, their wares expertly modelled by Aleksandr Vlasov in action against Dani Martínez (Ineos Grenadiers) at the 2021 Giro d’Italia.

Mancini allegedly told his investors that he had invested millions of dollars of his own money in the acquisitions – according to one account, US$9.4 million.

The SEC charges that this was a lie. “Mancini never invested any appreciable amount of money in the fund, either directly or as trustee of any trust,” the complaint reads.

Mancini also targeted alumni from the prestigious West Point Military Academy as investors, representing himself as a fellow graduate – but failing to disclose that he himself had never graduated, leaving the academy early due to an ethics breach. 

Mancini’s alleged web of deception has ensnared various other longstanding cycling industry figures, not least those who worked at Outdoor Capital Partners alongside him. These include:

  • Andrew Herrick (managing director alongside Mancini): a co-founder of Pedro’s, former VP Global Brand for GT Bicycles, former CEO of Crankbrothers, and former CEO of Intense Cycles. 
  • Eric Horton (head of product): A cycling industry veteran who is a former Head of Design at Giro, and worked on footwear and bike graphic design for Specialized 
  • Michelle VanGilder: Formerly of Crankbrothers and Selle Royal Group, and a purchasing manager at Felt Bicycles. 

All three individuals were listed on OCP’s website under ‘team members’ as of last week, but the website has since been updated to show Mancini as the sole employee. 

The New Jersey criminal complaint references an unnamed “co-conspirator 1” – a co-CEO and co-managing director; presumably Herrick – but does not charge this individual with any crimes as Mancini was the sole signatory on most of the company’s bank accounts. 

Eric Horton, meanwhile, told Bicycle Retailer & Industry News that he was “devastated by the allegations”, with an unnamed OCP team member saying that “we are victims in this just as much as anyone else.”

CyclingTips has approached various parties for comment – including De Rosa Cycles, Sam Mancini, Andrew Herrick, and other former OCP staff – but did not receive any response by time of publication. 

What next?

Mancini was arrested in Denver and has since been released on US$100,000 bail. The criminal case against him could result in up to 20 years in prison for each of the securities and wire fraud charges, and up to 10 years in prison for a money laundering charge. The SEC’s civil case could lead to the recovery of stolen assets, and could result in Mancini being blacklisted as an officer of a public company.  

While that’s happening: Limar, De Rosa, De Marchi, Cinelli, and Columbus are likely breathing a big sigh of relief. 

This story was updated July 30.

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