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SEC obtains final judgments over ‘green’ investment Ponzi scheme

The Securities and Exchange Commission has obtained final judgments against Troy B Wragg, Amanda E Knorr, Speed of Wealth, Wayde M McKelvy and Donna M McKelvy ordering disgorgement, prejudgment interest and civil penalties totalling more than USD135m.

The court ordered Wragg and Knorr to pay USD37,031,035.36 in disgorgement plus interest of USD3,713,772.06 jointly and severally with Mantria Corporation and a civil penalty of USD37,031,035.36 each; Speed of Wealth and Wayde McKelvy to pay USD6,273,632.78 in disgorgement plus interest of USD869,141.87 jointly and severally and a civil penalty of USD6,273,632.78 each; and Donna McKelvy to pay USD429,731.84 in disgorgement plus interest of USD55,172.93 and a civil penalty of USD214,865.92.

The parties were originally charged in a complaint filed on 17 November 2009. The complaint alleged that Wayde and Donna McKelvy, through their Denver-based company Speed of Wealth, 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 per cent to “hundreds of per cent” 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 Commission’s motion, the Court entered a temporary restraining order on 16 November 2009, and an order of preliminary injunction on 2 December 2009. After entry of the 13 September 2012 final judgments, permanent injunctions have now been entered against all defendants.

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