Investors in sleek hybrid sports car say they were conned
By Kluger Kaplan October 14, 2011
A South Florida businessman convinced investors to come up $4.5 million for shares in an electric car company. But they got nothing for their money, and a lawsuit alleges it was a scam.
Read the full story from The Miami Herald here.
BY ADAM H. BEASLEY
The Fisker Karma — a sleek, plug-in hybrid sports sedan — made its long-awaited debut earlier this year, and to heaping praise.
Car and Driver called the sports car, which fetches upwards to $100,000, “striking, luxurious, and easy on big-car guilt.” Popular Mechanic added: “The Fisker Karma is a standout luxury and performance vehicle, period.”
But for more than a half-dozen deep-pocketed financiers who wanted a stake in the sports car, the industry buzz was little more than salt in the wounds.
That’s because the $4.5 million they shelled out to buy preferred Fisker shares from John A. Mattera, a Boca Raton-based equity firm CEO and self-proclaimed philanthropist, has bought them nothing but frustration and embarrassment, according to a federal lawsuit filed in Fort Lauderdale last month.
Those investors allege Mattera and his partners employed “blatant and fraudulent misrepresentations” to separate them from their millions.
The money, shipped to a Fort Lauderdale title company to be held in escrow until the deal was completed, appears gone, attorneys for the plaintiffs say. The shares? They never existed, the suit claims — and even Mattera admitted to The Miami Herald this week.
But Mattera said allegations that he purposefully misled and defrauded the investors are “absolutely incorrect.”
Mattera acknowledges he never owned Fisker Series A-1 preferred stock, which the investors were told they were buying. He did have a substantial holding of similar Series B stock, which he said he tasked associates Bradford van Siclen and John Hartley with selling. Mattera said van Siclen, the New Jersey-based private equity broker who is a defendant in the lawsuit along with Hartley, was responsible for misrepresenting the offer. A message left for van Siclen at his business, The Praetorian Fund, went unanswered this week.
Miami attorney Loren Cohen, who represents the investors in the lawsuit, said Mattera, 50, was an active participant in the sales pitch, even introducing one of the potential shareholders to Henrik Fisker, the creator of the slick sports car, in the VIP booth of the Los Angeles Auto Show, the suit claims. (Efforts to reach Fisker’s spokesperson and general counsel for comment this week were not successful).
Cohen said his clients, who include a Destin-based businessman and a family trust from New Mexico, didn’t even get Mattera’s Series B shares out of the deal.
“It’s one thing to say, I sold you a Lexus and I’ll end up giving you an Infiniti,” Cohen added. “But the reality is, they ended up getting neither. It’s outrageous.”
For Mattera, it’s not the first time he has been accused of business malfeasance.
Palm Beach County Sheriff’s Office arrested him on fraud, larceny, and grand theft charges in 2001, and he served probation after agreeing to a plea deal.
In 2009, the Securities and Exchange Commission alleged he ran a penny-stock scheme in which he made fraudulent public statements to pump up stock prices at the same time that he was illegally selling unregistered shares of stock. He was ultimately banned from trading penny stocks and agreed to pay nearly $150,000 in fines, court records show.
Mattera’s history of civil litigation doesn’t end there. He has been sued repeatedly in county and federal court, and many of the complaints against him echo the most recent allegations.
In December 2000, a federal judge awarded a dozen Texans a $1.2 million judgment after Mattera and Praetorian failed to appear and defaulted on a lawsuit that claimed Mattera owed them more than $100,000.
The same year, Mattera lost a similar judgment in California, where he allegedly failed to pay a company $104,000 after receiving 400,000 shares of its stock.
And then in August 2011, he reached an undisclosed settlement in a Boca Raton-based suit that alleged another cash-for-shares deal that never materialized.
The common thread among all of these cases: Mattera used a title company owned by longtime associate Johnny Ray Arnold.
In the Fisker deal, the investors deposited the $4.5 million in Arnold’s First American Service Transmittal, where it was supposed to stay until they received proof of ownership. The money was pulled from the account, and it is not clear where it is now, the attorneys say. Arnold, another defendant in the most recent lawsuit, could not be reached for comment.
Mattera’s brushes with the law extend beyond the realm of white-collar crime. Boca Raton cops arrested Mattera on St. Patrick’s Day 2008, after a night out at Mizner Park turned into a violent, boozy bender, police records show. Paramedics called to his home found Mattera unresponsive in a pool of vomit and feces. When he awoke, Mattera attacked a fire-rescue captain, resulting in his being tased by police, the arrest report says. The charges were later dropped.
None of this has derailed Mattera’s quest to become a major player in South Florida’s charitable scene.
Last year, he was recognized as a U.S. Fund for UNICEF volunteer. He has sponsored Florida Atlantic University’s weekly football fan breakfast with legendary coach Howard Schnellenberger.
And he raised $22,000 for the American Red Cross earlier this year, paving the way for him being named a member of the Broward organization’s board.
John Karr, the chapter executive of the American Red Cross of Southern Florida, did not return a phone message left by The Herald this week, but was effusive of his praise of Mattera when the appointment was announced.
“John Mattera is a trailblazer when it comes to helping out the most important local causes in Southern Florida,” Karr said in February. “We couldn’t be happier with the latest addition to our board.”