NEW YORK (Reuters) - The U.S. Securities and Exchange Commission charged four individuals and two companies with running a $30 million Ponzi scheme that targeted elderly investors and people nearing retirement who were seeking environmentally friendly investments.
In a civil lawsuit filed Monday in Denver federal court, the SEC accused Mantria Corp of Bala Cynwyd, Pennsylvania and its principals Troy Wragg and Amanda Knorr of raising $122 million from more than 300 investors nationwide in a dozen fraudulent securities offerings.
The SEC said Mantria enlisted Speed of Wealth LLC, a Centennial, Colorado firm run by Wayde and Donna McKelvy, to encourage investors to liquidate retirement plans and home equity, and buy securities offering returns of 17 percent to “hundreds of percent” annually.
It said the McKelvys encouraged victims through seminars, the Internet and phone calls “to move at the speed of wealth” to invest in Mantria’s securities, receiving a 12.5 percent commission for their efforts.
According to the SEC, Mantria purported to use the securities to finance such projects as a “carbon negative” housing community in rural Tennessee, and production of “biochar,” a charcoal substitute made from organic waste.
Instead, it said Mantria overstated its own investment success, and used much of the proceeds from new investments to repay earlier investors.
“The only green these promoters seemed interested in was investors’ money,” said Don Hoerl, director of the SEC regional office in Denver, in a statement.
The SEC charged Mantria, Speed of Wealth, Wragg, Knorr and the McKelvys with fraud and the sale of unregistered securities. It is seeking the return of illegal profits, civil fines, and a freezing of the defendants’ assets.
According to the regulator, Wragg, 27, and Knorr, 26, live in Philadelphia; Wayde McKelvy, 46, lives in Sunny Isles Beach, Florida; and Donna McKelvy, 43, lives in Parker, Colorado.
A lawyer for Mantria, Wragg and Knorr did not immediately return a call seeking comment. The McKelvys could not immediately be located for comment, and it was unclear whether they or Speed of Wealth had retained counsel.
The case is SEC v. Mantria Corp et al, U.S. District Court, District of Colorado.
Reporting by Jonathan Stempel; Editing by Phil Berlowitz