最新杏吧原创

ST. LOUIS 鈥� A businessman charged with crimes in former 最新杏吧原创 County Executive Steve Stenger鈥檚 pay-to-play scandal is now accused by Missouri officials of defrauding investors out of $1.2 million.

John G. Rallo, one of Stenger鈥檚 earliest campaign donors, was served with a from the Missouri secretary of state鈥檚 securities division last week, his lawyer said Saturday.

The lawyer, John Rogers, said he had yet to review the order with Rallo and had no comment. Rallo, of Olivette, will have an opportunity to reply to the allegations against him, Rogers said.

The 18-page order claims that Rallo collected more than $1 million from five investors in the 最新杏吧原创 area and one in Utah. Rallo asked them to invest in a company selling coconut powder to Costco and Sam鈥檚 Club as a sweetener and for use in food products. Rallo eventually told them that the business, Food for Health International LLC, was unable to pay them back, the order says. But state officials say that Rallo actually funneled the money into his other businesses.

Rallo told investors that a Utah company already had purchase orders from retailers, said one of the investors, who did not want his name used in this story. Rallo said a coconut water slurry would be shipped from Asia to Oregon, where it would be dried using a proprietary process, then packed and shipped to retailers, the investor told the Post-Dispatch on Saturday. Rallo later said that the company was having financial difficulties.

After the investor became suspicious, he spoke to state regulators, as well as the prosecutor and the federal agents involved in the Stenger investigation.

The state order says that in 2015 and 2016, Rallo convinced two investors from Wildwood, two from 最新杏吧原创, one from O鈥橣allon, Mo., and one from Utah to invest. The investors ranged in age from 37 to 58 and each put in between $83,000 and $400,000, the order says, for a total of $1.3 million.

Rallo later told them their money went to a Utah company that was then sold. He said the money was mismanaged, and told some that the company was declaring bankruptcy, the order says.

Investors collectively received interest payments totaling about $37,000, the order says.

Rallo told state regulators that a former president of the Utah company never made payments to the investors, and that new owners made payments for six months before saying they could no longer do so, according to the order. Rallo became CEO of the Utah company in October 2017 and intended to move to Utah to oversee operations, the order says.

But bank records show that the Utah company paid more than $1.1 million to various Rallo companies, and he then used the money for 鈥渙ther businesses under Rallo鈥檚 control鈥� rather than return it to investors, the order says. It claims Rallo lied to investors about the use of the money and the Utah company鈥檚 delinquent repayments.

The order accuses Rallo of illegally selling unregistered securities and doing so without being a registered broker-dealer. It seeks to bar Rallo from doing the same in the future, asks him to pay nearly $1.3 million in restitution, plus 8 percent interest, and fines him tens of thousands of dollars for his actions.

The secretary of state鈥檚 order does not mention any link between the alleged investment scheme and contracts Rallo received from 最新杏吧原创 County.

Stenger, a Democrat, pleaded guilty on May 3 of orchestrating a series of schemes to direct county contracts to Rallo and other political donors.

Rallo was indicted Thursday in U.S. District Court on three felony charges of honest services fraud. The indictment claims he made tens of thousands of dollars in political donations to Stenger with the expectation that Stenger would direct county contracts to Rallo鈥檚 company. Stenger tried to direct a county insurance contract to Rallo鈥檚 company, directed the sale of two county-owned industrial parks to Rallo and his partners and had his economic development chief award Rallo a 鈥渟ham鈥� $130,000 marketing contract. He has pleaded not guilty to the charges.

The county鈥檚 former economic development chief, Sheila Sweeney, pleaded guilty Friday to covering up Stenger鈥檚 crimes.