THE MODERN PONZI: Federal Judge Orders Parties Not To ‘Harass’ Receiver In Mantria/Speed Of Wealth Case; Dozens Of Companies Now Ensnared In Litigation

A federal judge has issued an order that effectively puts a court-appointed receiver in control of dozens of entities related to Mantria Corp. and Speed of Wealth LLC in a search for “recoverable assets.”

One of the receiver’s duties is to determine if fraudulent transfers occurred between or among companies, according to the order.

The order, which is designed to prevent the dissipation of assets and maneuvering to hide or transfer money, is breathtaking because it covers not only Mantria and Speed of Wealth, but also “all of their subsidiaries, parent companies, and. . .  interests in any affiliated entities of any kind.”

All in all, the order applies to a staggering total of at least 55 entities, a figure that demonstrates the enormous task of unraveling a modern-day fraud amid a maze of corporations.

The SEC sued Mantria and Speed of Wealth in November, amid allegations that Mantria was running a “green” Ponzi scheme that focused on biochar and a “carbon negative” housing community in rural Tennessee  that purported to be environmentally friendly. Speed of Wealth allegedly helped Mantria get investment clients.

Appointed receiver in the case was John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services LLC.

U.S. District Judge Christine M. Arguello listed dozens of names, perhaps signaling that the order could become even broader by noting that it was “not limited to” the names on the initial list. She also ordered Anderson to come up with a liquidation plan and warned the entities and their agents not to meddle in receivership affairs.

Anderson was granted the authority to seek the court’s permission to place the entities in bankruptcy if the circumstances warrant such an approach. Arguello minced no words when ordering parties not to meddle. She specifically warned them not to “harass” Anderson or interfere in his duties as receiver (italics/bold added).

“The Receivership Defendants and all persons receiving notice of this Order by personal service, facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any action or causing any action to be taken, without the express written agreement of the Receiver, which would:

A. Interfere with the Receiver’s efforts to take control, possession, or management of any Receivership Property; such prohibited actions include but are not limited to, using self-help or executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any Receivership Property;

B. Hinder, obstruct or otherwise interfere with the Receiver in the performance of his duties; such prohibited actions include but are not limited to, concealing, destroying or altering records or information;

C. Dissipate or otherwise diminish the value of any Receivership Property; such prohibited actions include but are not limited to, releasing claims or disposing, transferring, exchanging, assigning or in any way conveying any Receivership Property, enforcing judgments, assessments or claims against any Receivership Property or any Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security agreement or other agreement executed by any Receivership Defendant or which otherwise affects any Receivership Property; or

D. Interfere with or harass the Receiver, or interfere in any manner with the exclusive jurisdiction of this Court over the Receivership Estates.

Here is the initial list of entities covered under Arguello’s order:

1. Mantria Realty LLC
2. Mantria Communities Inc.
3. Mantria Real Estate Opportunities Group LLC
4. Mantria Investments LLC
5. Mantria Financial LLC
6. Mantria Capital Advisors LLC
7. Mantria Industries LLC
8. Carbon Diversion Inc.
9. Mantria Records LLC
10. The Mantria Foundation Inc.
11. Mantria Realty FL LLC
12. Mantria Communities LP
13. Mantria Real Estate Opportunities Group I LP
14. KITN Investments LLC
15. The Mantria Renewable Energy Fund LP
16. The Mantria Place Renewable Energy Site Development LP
17. The Mantria Industries Hohenwald Tennessee Eco-Industrial Center Site Development L.P.
18. Earth Mate Technologies LLC
19. Clean Energy Components LLC
20. EternaGreen Capital LLC
21. The EternaGreen International Carbon Economy Network LLC
22. EternaGreen University
23. EternaGreen Global Corporation
24. C&M Industrial Center LLC
25. Mantria Industries II LLC
26. Carbon Diversion Carlsbad New Mexico Manufacturing Plant LLC
27. Indian Trail Estates LLC
28. Mantria Village LLC
29. Mantria Bluffs LLC
30. IronBridge Properties LLC
31. Legacy Ridge LLC
32. Iris Village LLC
33. Mantria Place LLC
34. The Mantria Group LLC
35. Mantria Indian Trail Development LLC
36. Indian Trail Estates Phase I LLC
37. Indian Trail Estates Phase II LLC
38. Indian Trail Estates Phase III LLC
39. Indian Trail Estates Homeowners Association Inc.
40. Legacy Ridge Homeowners Association Inc.
41. The Mantria Place Homeowners Association Inc.
42. SOW Trust Deed LLC
43. SOW Hard Money Loans Investment Club LLC
44. SOW Hard Money Loans II LLC
45. SOW Trust Deed Group II LLC
46. Trust Deed Group I LLC
47. SOW Hard Money 50 Economic Stimulus Investment Club LLC
48. SOW Mantria Income LLC
49. SOW Mantria Diversification LLC
50. SOW Mantria 5% LLC
51. SOW Mantria Place 25% LLC
52. SOW Mantria 25% LLC
53. Speed of Wealth Investments Gold Club LLC
54. Trust Deed 3.0 LLC
55. SOW MI 25% Sale of Systems LLC

Arguello said she recognized “that not all of Speed of Wealth, LLC’s assets and/or business may be related, directly or indirectly, to the conduct alleged in the Commission’s Complaint.”

Named individual defendants in the alleged $30 million fraud by the SEC in November were Mantria CEO Troy Wragg and Mantria COO Amanda Knorr, along with the company itself. Also named defendants were Speed of Wealth and its principals, Wayde and Donna McKelvy, formerly husband and wife.

One of the companies under the Mantria umbrella was Mantria Records LLC, which purportedly promoted a hip-hop duo known as ICEBLOC.

The case became notable for reasons beyond its size and scope. Wragg, for instance, appeared alongside former President Bill Clinton at the 5th Annual Meeting of the Clinton Global Initiative (CGI) in New York Sept. 25.

CGI had lauded Mantria in part for helping to “mitigate global warming” through its business practices. Just two months later Mantria and Speed of Wealth were accused of a colossal fraud.

After the CGI event in New York, Mantria and Speed of Wealth seized on Clinton’s name and the names of prominent individuals who attended the event to produce marketing materials used to entice investors.

Even after the SEC brought the charges, reporters who tried to contact Speed of Wealth received email pitches to join money-making opportunities.

Video promotions by Mantria and Speed of Wealth were notable for dropping the names of President Obama, former U.N. Secretary General Kofi Annan, President Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart, Muhtar Kent, CEO of the Coca-Cola Co. and actor Matt Damon.

Leeching off the names of celebrities, famous businesspeople and politicians to sell fraudulent financial schemes is a common tactic among multilevel marketing (MLM) and Ponzi scammers. By implying that prominent people endorse a product or service, the fraudsters hope to turn skeptics into clients.

Claims were made in the AdSurfDaily Ponzi scheme case, for example, that ASD President Andy Bowdoin had received an award from President George W. Bush for a lifetime of business achievement. The award proved to be the so-called Congressional “Medal of Distinction,” which is given for campaign contributions to the National Republican Congressional Committee and signifies only the ability to write a check for the purchase of banquet tickets.

In an SEC case last month, the agency alleged that a Staten Island investment-advisory business known as Gryphon Holdings Inc. told clients that famed businessman George Soros backed the company. A purported “testimonial” from Soros was fraudulent, the SEC said.