SEC Raps Several Executives Over Ponzi Scheme
Judge Christine M. Arguello, U.S. District Court Judge for the District of Colorado, entered final judgments against Troy B. Wragg, Amanda E. Knorr, Speed of Wealth, LLC, Wayde M. McKelvy, and Donna M. McKelvy ordering disgorgement, prejudgment interest, and civil penalties totaling more than $135 million.
The court ordered Wragg and Knorr to pay $37,031,035.36 in disgorgement plus interest of $3,713,772.06 jointly and severally with Mantria Corporation and a civil penalty of $37,031,035.36 each; Speed of Wealth and Wayde McKelvy to pay $6,273,632.78 in disgorgement plus interest of $869,141.87 jointly and severally and a civil penalty of $6,273,632.78 each; and Donna McKelvy to pay $429,731.84 in disgorgement plus interest of $55,172.93 and a civil penalty of $214,865.92.
The parties were originally charged in a Complaint filed on November 17, 2009. The Complaint alleged that Wayde and Donna McKelvy, through their Denver-based company Speed of Wealth LLC, as well as Mantria executives Wragg and Knorr, raised funds for numerous Mantria “green” initiatives such as a supposed “carbon negative” housing community in rural Tennessee and a “biochar” charcoal substitute made from organic waste.
The SEC alleged that Mantria’s “green” representations were fraudulent and that investors were falsely promised enormous returns on their investments ranging from 17 percent to “hundreds of percent” annually. Mantria’s environmental initiatives did not generate any significant cash, and any returns paid to investors were funded almost exclusively from other investors’ funds.
In addition, none of the relevant offerings were registered with the Commission, nor were any of the defendants registered as a broker-dealer or associated with a registered broker-dealer.
Upon the SEC’s motion, the Court entered a temporary restraining order on November 16, 2009, and an order of preliminary injunction on December 2, 2009. After entry of the September 13, 2012 final judgments, permanent injunctions have now been entered against all Defendants.