Energae LP update: FBI officials visit Duane Darrell Smith’s office in Mason City, Iowa

I took this  photo of the Multi-Financial Securities Corp. logo on the outside of Darrell Duane Smith’s Mason City, Iowa, office in April 2013. Sources confirm that the sign remains today even though Smith lost his job with Multi-Financial in March 2012 and he was forced to give up securities and insurance license in Iowa this past summer.

 

A spokesman for the FBI in Omaha, Neb., which supervises all Iowa actions, confirmed to Agweek that the agency on Oct. 3 visited the office of Darrell Duane Smith, in Mason City, Iowa, but declined to specify the nature of the visit.

Lawyer John Chapman, of Chapman and Associates, a separate Cleveland, Ohio, law firm seeking compensation for investors, says Smith sold securities from the office for Energae, LP, based in Clear Lake, Iowa, and for an entity called I-Lenders, which provided loans or other funding for Energae or associated entities. Chapman in June 2013 filed actions through FINRA against Smith’s former employer, Multi-Financial Securities Corp., now known as Cetera Advisors.

Chapman’s clients allege Multi-Financial failed in its oversight of Smith as a stock broker. Multi-Financial Corp., stopped employing Smith in early March 2012 but the company’s logos are still prominently displayed in Smith’s exterior office windows, says an Agweek source in Mason City.

Jim Fitzsimmons, a Mason City attorney working with Chapman in the case, coincidentally has an office two floors up in the same building that Smith’s office in Mason City. In the morning on Oct. 3, Fitzsimmons saw the FBI agents, who wore jackets that identified them and were carrying out “what appear to be boxes of documents.”

Agweek attempted to contact Smith and left a message Steve Wandro, another attorney representing Energae, based in Des Moines, Iowa. Smith’s phone messages were full. Wandro’s message wasn’t immediately returned.

Two sets of North Dakota plaintiffs have separately sought to force Energae into a receivership. The first effort ended in a settlement and dismissal. The second petition is pending with no scheduled hearings, according to the Cerro Gordo County Clerk of Courts office. 

Smith’s office building once housed a bank that was famously robbed by the John Dillinger gang on March 13, 1934.

Agweek began reporting on Smith in March 2012 when he appeared in Grafton, N.D., offering farmers information on an opportunity to invest $10,000 for the opportunity to market beets through an ethanol plant in Grafton. The plan did not go forward and the mothballed, former Alchem, Ltd., corn ethanol plant at Grafton was instead dismantled. Numerous North Dakota farmers and others are investors in Energae and some have used tax credits that Smith had promoted.

For further updates on Energae, please see the Oct. 7, 2013, issue of Agweek.

I took this picture of Darrell Duane Smith in Grafton, N.D., on March 23, 2012. He was giving farmers information about how they could invest $10,000 to deliver beets to a plant that he expected to be acquired, refurbished and fitted to run both beets and wheat byproducts.

The PowerPoint presentation referred to a Duaine Espegard — a long-time banker and public servant — as his project manager “in negotiation,” even though Espegard said he’d only spoken to Smith the day of the presentation, and warned him not to use his name. The hand-out documents listed key company associates with incorrect personal and academic background information. Some said they didn’t know they were listed in the materials, which later were described as for information only.

In the end, Energae didn’t purchase the old Alchem Ltd. corn-ethanol plant at Grafton facility, which was dismantled.

 

 

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