SEC charges Mantria with Ponzi plot

 

Promises of Mantria jobs in Hohenwald came crashing down Monday afternoon when the Securities and Exchange Commission alleged two top Mantria executives may have been involved in a Ponzi scheme aimed at investors interested in environmentally friendly business ventures.

 

Mayor Don Jones said the City of Hohenwald had invested no money in the privately owned property  targeted by Mantria.  But property owner Joe Danielle had made significant improvements to two buildings and landscaping in anticipation of the Mantria company opening an industrial operation in Hohenwald.

Danielle said Tuesday morning  his tenant, the Mantria Corporation, was current on the rent of his property and he was unaware, until late Monday evening, of the company’s problems.

According to an SEC news report, two people in the Denver, Colorado area, Wayde and Donna McKelvy, “targeted elderly investors or those approaching retirement age to finance in ‘green’ initiatives of Pennsylvania-based Mantria Corporation.”  The couple advocated investment in Mantria opportunities through a company known as Speed of Wealth LLC, based in Denver.

 

Two other promoters, Mantria executives Troy Wragg, 27, and Amanda Knorr, 26, assisted the McKelvys through seminars and Internet “webinars” in encouraging people to convert financial investments such as retirement plans and home equity, into Mantria investments, the SEC reported.

 

Claims of large returns of 17 percent annually and more were “bogus” the SEC stated.

“These promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns,” Director Don Hoerl of the SEC’s Denver Regional Office was reported to have said.

The four face charges of violation of antifraud laws and with offering registration provisions of the securities laws.  The McKelvys also face charges of violating broker-dealer registration requirements.

Wragg and Knorr started Mantria in 2005 with about $5,000 in cash. The Philadelphia Business Journal reported in October of 2007 Wragg made his first million before the age of 23.  Tennessee landowners were offered prices “well above the asking price” if they would “agree to get paid only after Mantria sold land to other developers,” the report read.  Mantria generated $2 million in land sales within a few months.

Mantria diversified into the bio-char business and told City of Hohenwald officials they would begin generating an environmentally friendly product in Hohenwald by October of this year.

The Hohenwald facility was scheduled to create bio-char, based on a biorefinery system created by Carbon Diversification.

But time lines were not being met, Mayor Jones said, making him suspicious and prompting him to make a surprise visit to the Dunlap facility last month.

“The facility was there and the autoclaves were there,” Mayor Jones said.  “It appeared to be legitimate.”

After touring the plant and speaking with employees, Mayor Jones paid a visit to Dunlap’s mayor who expressed concern over a Mantria land development in the area.  Residents in the Sequatchie area were opposed to the land development, as was noted in online blogs.

But he became increasingly leery when Wragg failed to meet the company’s own deadlines and did not keep in contact by phone or email.

“We were not happy with the progress they were making,” Mayor Jones said.

But on a positive note, if there can be one in this situation, there are now two buildings in Hohenwald ready to be aggressively marketed, the mayor indicated.

“We will not lose hope,” the mayor continued, acknowledging his disappointment for the 50 to 70 people who hoped to find employment from the corporation.

The main one to suffer is the landlord, he added.

The SEC continues its investigation.