FOR CLEAR EDUCATION ABOUT PONZI SCHEMES
SEC Charges Four Promoters of Investment Scheme For Operating $30 Million Pure Ponzi Scheme Based in Denver Area
Denver, Colorado – Dec 2009: The Securities and Exchange Commission today charged four individuals and two companies involved in perpetrating a $30 million Ponzi scheme in which they persuaded more than 300 investors nationwide to participate in purported green environmentally-friendly investment opportunities. The SEC's complaint, filed in federal court in Denver, charges Mantria and Speed of Wealth as well as the McKelvys, Wragg and Knorr, and seeks an emergency court order to freeze their assets.
Editors Note: This is clearly a Ponzi Scheme definition by the SEC in itself. Four people formed a corporate core that sold the scam securities. It is not a Pyramid Scheme using a web of tiered salespersons. In our MLM WatchDog accuracy in media project, we try to educate reporters on the difference. ALSO, GOOD MLMS ARE NOT RELATED TO EITHER A PONZI OR PYRAMID SCHEME!
The SEC alleges that Wayde and Donna McKelvy, living in the Denver area, particularly targeted elderly investors or those approaching retirement age to finance such "green" initiatives of Pennsylvania-based Mantria Corporation as a supposed "carbon negative" housing community in rural Tennessee and a "biochar" charcoal substitute made from organic waste. The McKelvys promoted Mantria investment opportunities through their Denver-based company Speed of Wealth LLC. With the help of two other promoters who are Mantria executives — Troy Wragg and Amanda Knorr of Philadelphia — they convinced investors attending seminars or participating in Internet "webinars" to liquidate their traditional investments such as retirement plans and home equity to instead invest in Mantria.
The SEC alleges that the "green" representations were bogus claims, and investors were falsely promised returns on their investments ranging from 17 percent to "hundreds of percent" annually. In fact, Mantria's environmental initiatives never generated any significant cash, and any returns paid to investors have been funded almost exclusively from newer investors' contributions. "These promoters fraudulently exaggerated Mantria's green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns," said Don Hoerl, Director of the SEC's Denver Regional Office. "In reality, the only green these promoters seemed interested in was investors' money."
They claimed that Mantria was the world's leading manufacturer and distributor of biochar and had multiple facilities producing it at a rate of 25 tons per day. In fact, Mantria has never sold any biochar and has just one facility engaged in testing biochar.
According to the SEC's complaint, Speed of Wealth has frequently advertised its events through television, radio and print advertising as well as Internet marketing. At seminars and webinars sponsored by Speed of Wealth, Wayde McKelvy along with Wragg or Knorr generally conduct a two-part presentation in which they urge investors to liquidate all of their traditional investments, including individual retirement accounts, employer-sponsored 401(k) plans, mutual funds, stocks, bonds, and savings accounts. McKelvy also encourages investors to borrow as much as possible against home equity, parents' home equity, and business lines of credit. He then recommends that investors use all of their funds to invest in what he describes as the "consistent and safe" high-yield securities offered by Speed of Wealth and Mantria.
The SEC's complaint alleges the four marketed Speed of Wealth and Mantria securities with high-pressure tactics. They frequently offer 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. In seminars, webinars, and conference calls, Wayde McKelvy often called upon past unknowing Ponzi investors to give "testimonials" about their receipt of high returns. The SEC alleges that Mantria and Speed of Wealth used investor funds to pay returns to other investors in typical Ponzi scheme fashion. Mantria and Speed of Wealth also did not tell investors that they kept a significant amount of their funds to generously pay commissions of 12.5 percent (about $3,750,000) to the McKelvys.
Tags: Ponzi, Misspelling Ponsi, Ponzi scheme, Securities and Exchange Commission, Denver, SEC Denver Colorado, Court case Ponzi Scheme, NOT MLM, Ponzi exposed, true definition Ponzi, Ponzi explained, Ponzi Defintion.
