The SEC has charged two companies and four individuals with involvement in a nationwide $30 million Ponzi scheme that lured over 300 elderly and retirement-age individuals to invest their savings in a “green” investment opportunity. According to the SEC press release, Wayde and Donna McKelvy used their company Speed of Wealth to promote investment in Mantria Corporation, a supposedly environmentally-friendly company based in Pennsylvania involved in green initiatives. Two executives at Mantria, Troy Wragg and Amanda Knorr, are said to have collaborated with the McKelvys to persuade investors to “liquidate their traditional investments such as retirement plans and home equity to instead invest in Mantria” and have also been charged.
The SEC claims that the McKelvys, Wragg and Knorr “overstated the scope and success of Mantria's operations in several ways to solicit investors,” including the defendants’ claims that “Mantria was the world’s leading manufacturer and distributor of biochar” when in reality the company had never sold any of the charcoal substitute. The SEC further asserts that “Mantria’s only source of revenue has been from its resale of vacant lots for its purported residential communities in Tennessee,” but, in classic Ponzi scheme style, the revenue never went to investor returns because “Mantria provided 100 percent financing for almost all of its vacant lot sales to buyers using other investors’ funds.”
Speed of Wealth advertised and hosted seminars and webinars where the companies’ promoters urged potential investors to “liquidate all of their traditional investments” to invest in the supposedly reliable and “high-yield securities offered by Speed of Wealth and Mantria.” The SEC further alleges that the defendants used high-pressure tactics to market both companies’ securities and that they “frequently offer(ed) short-term incentives and bonuses in various programs to induce investors to ‘pledge’ their investments, or to induce those who have pledged to send in their money immediately.” The defendants further promoted investment with allusions to “Mantria’s imminent closing of sales worth hundreds of millions of dollars” that were guaranteed hits on Wall Street.
The SEC contends that in reality, Mantria’s green initiatives have generated no significant cash and that the Ponzi scheme relied on other investors’ contributions to pay returns. The SEC further claims the supposed green representations “were laced with bogus claims,” that the McKelvys, Wragg and Knorr pressured older investors to immediately liquidate their traditional investments, and that the two companies withheld the McKelvys’ generous commission of 12.5% from investors. “Investors were falsely promised enormous returns on their investments,” the SEC stated, and the $30 million scheme ultimately defrauded over 300 investors nationwide. |
