$9M missing after Quepasa founder’s new startup fails
When internet entrepreneur Jeff Peterson was looking to reboot his career in Arizona a few years ago, the high-school dropout turned to prominent Mesa businessman Ross Farnsworth Jr.
Peterson had founded Quespasa, an online sensation that once reached a market value of $400 million during the go-go dot-com era. Now, he wanted guidance on what to do next.
Farnsworth, whose surname is well known throughout the East Valley and in Mormon circles, agreed to mentor Peterson, who was in need of a confidence boost, according to Farnsworth’s son.
As the older Farnsworth was providing business guidance to Peterson, the student asked the teacher a favor: Would Farnsworth put money into a new internet startup called Mobile that he had founded?
The idea seemed revolutionary. Mobile, launched in March 2013, would connect workers around the world with employers who could buy their services. A graphic artist in Phoenix, for example, could sell his skills to someone in Paris.
Peterson, a Santa Barbara, California, native who made his name in the Valley, pitched Mobile as the next Quepasa.
Early Quepasa investors struck it rich on the bilingual, Latino-focused social media website he created in 1997 in Phoenix.
And Peterson had a track record of getting big names to back him.
At Quepasa, Phoenix sports mogul Jerry Colangelo and Denver Broncos star John Elway had been investors. He had a marketing deal with pop sensation Gloria Estefan, and the company’s logo was peppered throughout Phoenix’s downtown baseball stadium.
Former Arizona Gov. Janet Napolitano appointed him to the ArizonaMexico Commission’s board. Former state Attorney General Terry Goddard put him on a business advisory committee.
Peterson brought that experience to
the table when he asked his mentor for new funding.
Farnsworth provided $400,000 in capital for Mobile.
He wasn’t alone.
An elderly Pennsylvania millionaire invested $2 million. Bob Ramsey, a Tempe businessman, kicked in a quarter-million dollars.
Peterson, meanwhile, assembled an all-star board and group of advisers who could introduce him to more deep-pocketed investors.
Mobile’s board included former U.S. Attorney for Arizona Dennis Burke, who had been Napolitano’s chief of staff when she was governor; Marco Lopez, a former director of the Arizona-Mexico Commission and an adviser to Mexican billionaire Carlos Slim; and Ramsey, who founded Southwest Ambulance Co.
According to Mobile financial documents provided by a board member, advisers and consultants included Democratic National Committee chairman and presidential candidate Howard Dean; ex-Phoenix Mayor Phil Gordon; Mexican-American Grammy Award winner Pepe Aguilar; and Hollywood movie-maker Howard “Hawk” Koch.
Peterson, who used his Quepasa wealth to become a major donor to Democrats, sought out Republicans, too.
A relative of 2012 Republican presidential candidate Mitt Romney and a relative of the Marriott hotel chain owners were put on Mobile’s payroll and were paid at least $151,000 combined, company records show.
With Peterson and other company fundraisers bringing in cash, some Mobile investors parted ways with their individual retirement accounts or 401(k) funds in hopes of making it big with the latest online business sensation.
Along with the storied reputations of Mobile’s board and advisers, investors were assured those handling the money wereblue chip.
Peterson hired Wilson, Sonsini, Goodrich & Rosati, a Palo Alto, California, law firm that represented Facebook, as the conduit for transferring funds to Mobile.
The firm, which monthly transferred tens of thousands of dollars to Mobile, declined numerous requests to comment.
Peterson, who speaks fluent Spanish, also forged a friendship with Silicon Valley businessman David Lopez, father of actress and musician Jennifer Lopez. He persuaded David Lopez to become an adviser, investor and pitch man. And Peterson regularly dropped Jennifer Lopez’s name with potential clients to gain their trust, investors said.
In total, Mobile from 2013 to 2016