This is a story about obsession.
It is a story about anger and justice and revenge and righteousness and arrogance and hubris and criminality. It is all that. That is true.
But mostly, it is a story about obsession.
This is the story of how Los Altos resident Mike Petras exposed and brought down not only a $600 million energy company, but also a $1 billion Ponzi scheme.
To get the story, you’ll have to pay attention. It is complex. And there are nuances and particulars that can’t be sown into an 800-word column. It is too fascinating, too rife with head-shaking disbelief.
It started in 2003, when Petras, an energy entrepreneur, founded a company in Dallas named Franklin Power, designed to sell electricity wholesale.
In 2004, the company went belly-up, and Petras took what was supposed to be a relatively large buyout and moved back to California.
But in 2010, after getting only a small percentage of his buyout from Franklin, Petras had a hunch that his partner did not actually bankrupt the company.
In fact, Gary Mole had stolen Petras’ idea, taken the money that he was supposed to have invested in Franklin, and started his own company doing the exact thing they were supposed to have done together. He had turned Glacial Energy into a $600 million company.
For six months, Petras stewed and debated whether he should go after Mole. Finally, he decided yes.
“The seminal moment for me came when I was flying back from a meeting in Geneva and I watched ‘The Social Network’ on the plane,” Petras said. “And when I landed, I said to myself, ‘I have to beat these guys up.’”
Petras is not one to hire an attorney and sit back and let him do his job. He is one to fire up his computer, night after night, and access and pore over esoteric, obscure documents that most people would not even know were available. He is one to discuss and fume and deliberate about his discoveries, which only fueled his desire to dig deeper, learn more, get himself more emotionally entwined in this web of deceit.
While doing endless amounts of research for his case against Mole, he discovered that Mole and Glacial Energy were only a pawn in a larger game. Platinum Partners, a hedge fund in New York that produced Bernie Madoff-like returns for its investors, was doing something shady. Petras’ research pieced together a narrative that he showed to the New York Attorney General in 2011, the U.S. Attorney General and the U.S. Securities and Exchange Commission.
“When I presented everything I learned to the New York AG – I’ll never forget this,” Petras said. “But he said, ‘I get it. I get it. These guys are all criminals; they just use lawyers instead of guns.’ Then he said, ‘It’s not that we don’t have an interest. It’s that we are having a hard enough time with the dumb criminals. It’s going to be really hard to get the smart ones.”
Six years later, he feels vindicated. Mole was arrested in New York in 2015 on six felony counts, including transferring money from Glacial Energy to blood diamond mines in the Congo as a way to hide income. Mole pled guilty of tax evasion and was convicted.
And less than a month ago, the key decision-makers in Platinum Partners – the same men to whom Petras appealed six years ago and asked for the balance of the settlement he never received from Franklin – were arrested and accused of running the biggest Ponzi scheme since Madoff.
Petras, meanwhile, sits in limbo in Los Altos. He may or may not benefit financially from the work he has done to topple these two corrupt businesses. He got a mention in Reuters Dec. 24 about the project he undertook on his own, but otherwise he has not received great acclaim.
This final chapter has not yet been written. But I have to wonder what his legacy will ultimately be, the author of a crime story that has only a ghostwriter.
“The thing that makes me most sad and angry is not that they stole my idea,” Petras said, “it’s that they stole my idea to do really bad things with it.”