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A criminal complaint filed under seal in U.S. District Court in Concord in December and unsealed Oct. 15 charges Roberto Montano, aka Jorge Roberto Montano Pellegrini, with wire fraud. The civil lawsuit, filed by Lebanon-based Global Forest Partners and an affiliate of the California Public Employees Retirement System, alleges that Montano, 49, California biofuels developer Kirk Haney, and companies they control are guilty of breach of contract, theft, fraud and other violations of the law.
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Global Forest Partners manages an investment portfolio that is nearly as valuable as Dartmouth College’s endowment and includes about 2 million acres of timberland in Australia, Brazil, Cambodia, Chile, Colombia, Guatemala, New Zealand, Uruguay and the southeastern United States. Global Forest has 24 professional employees.
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By the beginning of this decade, Global Forest had amassed more than $3 billion in assets. That made it a big player in an often overlooked corner of the investment market that TimberLink, a consulting firm, estimated in 2011 comprised about $30 billion in assets.
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In 2007, according to an affidavit filed in court by an FBI agent, Global Forest began investing “about $45 million to $50 million” from a large pension plan to develop teak plantations in the Peten region of Guatemala.
The investor was the California Public Employees Retirement System, or Calpers, which has more than $300 billion in assets. Calpers participated using Sylvanus LLC, an affiliate with nearly $500 million invested in forest land. A Calpers spokesman confirmed the giant pension fund’s ownership interest in Sylvanus, but referred other questions to Global Forest.
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Eventually, Calpers provided most of the $45 million to $50 million that was used to pay for land, supplies, equipment and labor needed to plant, maintain and harvest teak trees on a new plantation, according to the FBI affidavit, which describes but doesn’t name the giant pension fund. In 2010, investors organized by Global Forest began forking over $25 million more to fund a second plantation.
The plantations aimed to capture a slice of the global market for teak which, according to a 2012 report from the United Nations Food and Agriculture Organization, is one of “the tropical hardwoods most in demand for the luxury market and heavy duty applications.” While natural teak forests are found only in India, Laos, Myanmar and Thailand, more than 75 percent of the global supply comes from plantations.
The Guatemalan teak plantations that were financed by Calpers and other investors who ponied up tens of millions of dollars — at least $70 million, according to the FBI affidavit — covered as many as 25,000 acres. The U.N. Food and Agriculture Organization estimated that in 1998 Guatemala had had only about 4,000 acres of teak.
Montano played a key role, according to court filings. He “held himself out as the chief executive officer” of Green Millennium, the company that Global Forest and its investors hired to manage the Guatemalan project, according to the affidavit.
Montano opened multiple spigots to boost his illicit personal cash flow, according to the affidavit, which alleges that he pocketed $2.6 million in operating funds, $1.4 million in subsidies from the Guatemalan government and at least $5.3 million in proceeds from loans that improperly mortgaged properties owned by Global Forest investors.
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Montano is also a defendant in a civil lawsuit filed in Grafton Superior Court in November by Global Forest, Sylvanus and other investors seeking to recover more than $10 million that was allegedly stolen. The lawsuit also names Haney, a San Diego investor and entrepreneur, as a defendant. Haney and Montano were the co-owners of Green Millennium, the lawsuit says.
