UPDATED 11:08 A.M. ET (U.S.A.) On a day Americans cherish as a great symbol of the continuation of Democracy, images of their President are being used to create the impression he has endorsed a “program” HYIP hucksters sought to popularize in the aftermath of the August 2012 collapse of the Zeek Rewards “program” amid SEC allegations that Zeek was just another massive Internet scam.
“Just join their team and you will receive all the help you need to grow your own business,” an animated Obama tells prospects in a video promoting Ultimate Power Profits. “By doing so, your earnings will increase. There is no hidden agenda. They showed me how their system worked and I was impressed. It is a fully legal and U.S.-patented system they use to make money.”
Obama’s image previously was used in affiliate promos for MPBToday, a purported MLM “grocery” program whose operator was arrested on a racketeering charge in Florida last month. A building that housed MPB Today’s operations is the subject of a federal forfeiture action in U.S. District Court for the Northern District of Florida. The forfeiture case was filed July 31, 2012.
Less than three weeks later — on Aug. 17, 2012 — the SEC alleged Zeek was a $600 million Ponzi and pyramid scheme. Zeek and MPBToday are known to have promoters in common, including serial Ponzi scheme pitchman “Ken Russo,” also known as “DRdave.”
On Aug. 18, only a day after the SEC’s Zeek action late on Friday afternoon, the PPBlog began to receive spam about the UltimatePowerProfits “program.” (See Comments thread below this story. The Blog established a Ponzi-forum tie between Zeek and Ultimate Power Profits.)
On Aug. 20, the office of North Carolina Attorney General Roy Cooper — which also had been investigating Zeek — issued a warning on “reload scams” in the wake of the SEC’s Zeek action.
Ultimate Power Profits is not the first “program” to make a claim about a “U.S. patent.” The JSS/JBP scam, which purported to pay an annualized return of 730 percent and purportedly was operated by former AdSurfDaily Ponzi-scheme pitchman Frederick Mann, also made a claim about a U.S. patent.
It is not uncommon for HYIP scams and MLM frauds to plant the seed that a “program” is endorsed by an agency of the U.S. government or a U.S. politician. ASD’s Andy Bowdoin was accused in 2008 of trading on the name of George W. Bush, then the President of the United States and Obama’s predecessor.
Images of former President Bill Clinton and Secretary of State Hillary Clinton were used in the massive Mantria “green” Ponzi scheme in 2009.
In 2012, JSS/JBP came under the lens of CONSOB, the Italian securities regulator. Some promoters, however, didn’t miss a beat. (Compare the images in the screen shots below. The first is from a promo for an emerging “program” known as RicanAdFunds; the second is from a promo for Zeek; the third is from a promo for JSS/JBP.)
Mantria CEO Troy Wragg in a music video by ICEBLOC.
BULLETIN: Two pitchmen for the Mantria Corp. “green” Ponzi scheme have been ordered to pay millions of dollars in disgorgement and penalties, including a purported wealth coach who advised people who contacted him after the 2009 collapse of Mantria to join the Trump Network MLM “opportunity.”
Mantria purportedly was an environmentally friendly investment opportunity. In reality, the SEC said, it was a massive Ponzi scheme that was selling unregistered securities through unregistered broker-dealers.
Any returns paid to investors “were funded almost exclusively from other investors’ funds,” the SEC said.
Wayde M. McKelvy of Speed of Wealth LLC was ordered by U.S. District Judge Christine M. Arguello of the District of Colorado to pay $6,273,632.78 in disgorgement, interest of $869,141.87 and a civil penalty of $6,273,632.78.
McKelvy, an MLM pitchman who also was pushing Mantria, described himself as a wealth coach with “Wealthalete[s]” as pupils and prospects.
McKelvy’s former wife — Donna McKelvy — was ordered to pay $429,731.84 in disgorgement, interest of $55,172.93 and a civil penalty of $214,865.92.
Arguello ordered even greater disgorgement and penalties against Mantria principals Troy B. Wragg and Amanda E. Knorr.
“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,” the SEC said today.
All in all, Arguello ordered more than $135 million in monetary relief in the Mantria/Speed of Wealth case, the SEC said.
The agency brought the Mantria Ponzi case in 2009, saying the “promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns.”
Strangeness marked the early days of the Mantria case. When reporters contacted Wayde McKelvy by email for comment, they received back a pitch for the Trump Network.
“I am totally focused on one thing right now which I believe will be very, very fun and the opportunity to put money in your pocket by owning you’re [sic] own business with the help of ‘The Donald,” one of the McKelvy pitches claimed.
Among other things, Mantria traded on the name of former President Bill Clinton, along with a host of other politicians and celebrities. It is not unusual for scams to attach their names to prominent individuals.
For starters, Zeek affiliates being approached by upline sponsors and email/website appeals to send in money “to defend Zeek Rewards and all of our independent businesses as per our legal rights of due process” might want to read this July 25 PP Blog post.
It’s about how wordplay was used to sanitize HYIP scams.
For additional background, Zeek affiliates might want to read this July 28 PP Blog post.
It’s about how purported Zeek “consultant” Robert Craddock sought to disable the Hub of Zeek critic “K. Chang.” Craddock now is part of the effort to raise funds to “defend” Zeek affiliates.
Zeek and untold thousands of its minions are known to have a tin ear for PR. That tin ear is on full display again today, with a “warning” from the leaders of the effort to “defend” Zeek from the SEC’s Aug. 17 allegations that it was a $600 million Ponzi and pyramid scheme not to contact the SNR Denton law firm.
“We have asked the firm to provide us the names of the individuals that are calling; we will refund your donation and will remove you from the group to be represented if you call. The law firm is only going to discuss the case with the 12 leaders and we will put out the information to the entire group on this site.”
“This site,” as it were, is this site, which calls itself ZTeamBiz.
ZTeamBiz, which calls itself a “professional organization,” says its has hired SNR Denton. The precise reason why is unclear, although ZTeamBiz says the “SEC has tried to make us all believe that Zeek Rewards was an ‘investment’ and a Ponzi scheme. All the pages that were submitted by the SEC indictment has all been one sided and what we believe to be a misrepresentation of the truth and facts of what Zeek Rewards was as a viable and legal business.”
And ZTeamBiz also accused the SEC of misleading a federal judge.
One of the persons on the ZTeamBiz squad — although it’s unclear if his presence is formal or informal — is Todd Disner. Disner is a former pitchman for the AdSurfDaily Ponzi scheme and, along with former attorney Dwight Owen Schweitzer, sued the government in November 2011. Disner and Schweitzer alleged that prosecutors and a U.S. Secret Service agent presented a “tissue of lies” to a federal judge when bringing the civil portion of the ASD Ponzi case in August 2008.
Disner and Schweitzer made that claim after ASD had lost the case in U.S. District Court and the U.S. Court of Appeals. Among other things, Disner and Schweitzer claimed the government had gone shopping for a friendly judge when it brought the forfeiture proceedings.
That judge allegedly was targeted with a false lien by Kenneth Wayne Leaming, who also targeted three federal prosecutors and a Secret Service agent with false liens, according to the FBI. Leaming was arrested by an FBI Terrorism Task Force in November 2011. He is a purported “sovereign citizen.” All five of the federal officials targeted in the alleged lien campaign have ties to the ASD case.
ASD President Andy Bowdoin pleaded guilty seven months later to a Ponzi-related charge of wire fraud. He is scheduled to be sentenced Wednesday.
Zeek is known to have members in common with ASD, which federal prosecutors have described as a $119 million Ponzi scheme that created at least 9,000 victims before its 2008 collapse amid allegations by the U.S. Secret Service of Ponzi fraud.
Like Zeek, ASD claimed it was not offering an investment program. And like Zeek, ASD planted the seed it offered a daily payout rate of 1 percent a day or more.
Like Zeek, ASD came under investigation by the U.S. Secret Service. The agency has referred to ASD as a “criminal enterprise,” with the U.S. Department of Justice calling ASD “insidious.”
Those descriptions apparently were not enough to dissuade investors from throwing money at Zeek, which has listed ASD members as “employees.”
On Aug, 4, Zeek itself blasted unspecified “North Carolina Credit Unions” for raising concerns about Zeek. Zeek warned members to toe the company line.
The SEC was in federal court 13 days later.
Zeek also is known to have members in common with JSS Tripler/JustBeenPaid, which appears now to have morphed into something called “ProfitClicking.” Both JSS/JBP and ProfitClicking may have ties to the sovereign-citizens movement.
A domain registered in the name of purported JSS/JBP operator Frederick Mann once linked to videos featuring Francis Schaeffer Cox, a purported sovereign citizen implicated in a murder plot against public officials in Alaska.
Because HYIP scams typically are promoted on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup — and because Zeek, JSS/JBP, ProfitClicking and ASD all had a presence on those forums — questions have been raised about whether cash was circulating between and among various fraud schemes and placing U.S. banks in the position of possessing fraudulent proceeds.
A receiver has been appointed to marshal the assets of the alleged Zeek fraud.
Despite the appeal by ZTeamBiz for Zeek affiliates to send in money to “defend” themselves and the company, the interests of all Zeek affiliates almost certainly are not equivalent. Net “winners” almost certainly are at risk of clawback lawsuits from the receiver. Such court actions are used to enlarge the pool through which victims of a Ponzi fraud receive a disbursement designed to make them as whole as possible.
It’s often the case that victims never are made whole and receive disbursements of dimes or even pennies on the dollar. Such is the case to date for victims of the 2009 Trevor Cook Ponzi caper in Minnesota. That scheme was a form of affinity fraud targeted largely at people of faith, including senior citizens.
Post-Ponzi receiverships sometimes turn into an international paper chase because scammers hide money offshore. Reverse-engineering a Ponzi caper can take years. Even as Zeek receiver Kenneth D. Bell begins his duties, scammers on the Ponzi boards are planting the seed that the receivership cannot be trusted.
In the 2009 Mantria/Speed of Wealth Ponzi scheme case, which in part was pushed MLM-style, a federal judge issued a specific order not to interfere with the receiver.
From YouTube sales pitch for BidsThatGive by Randy Jeffers. (Children's faces masked by PP Blog.)
EDITOR’S NOTE: It is true that far too many of the world’s children live in poverty. It also is true that children may become the objects of criminals who engage in human trafficking and that children are exploited in the sex trades. It is equally true that legitimate charities exist to combat these horrific situations and that one MLM “program” after another has tried in recent times to tug at the human heart and “marry” their “programs” to a purported cause. If you desire to improve the human condition for the masses of children, it likely is best to donate directly to a legitimate charitable organization, rather than joining a get-rich-quick scheme that says it is doing good work behind the scenes.
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UPDATED 6:57 P.M. EDT (U.S.A.) WARNING: The following development in MLM La-La Land may be harmful to your gag reflex.
Zeek Rewards, the U.S.-based MLM “program” that wraps itself in the American flag, collects sums of up to $10,000 from participants, plants the seed affiliates can earn a return of between 1 percent and 2 percent a day while insisting it is offering neither securities nor an investment program, has a payout scheme similar to the AdSurfDaily Ponzi scheme and securities swindle, is married to a penny-auction site known as Zeekler that has told successful bidders for sums of U.S. cash that they can receive their money via offshore payment processors and preemptively denies it is a pyramid scheme, has some emerging, U.S.-based competition.
The name of the “program” is “BidsThatGive” — and it unabashedly tugs at heartstrings while at once asking prospects to imagine themselves behind the wheel of a grand automobile and feeling good because they also could become a “Contributor” for $10 a month, a “Guardian” for $50 a month, a “Benefactor” for $100 a month” or a Global Ambassador” for $250 a month and pile up mountains of cash while they’re displaying a social conscience.
Two of the core aims of the “program,” according to a nine-minute video promo running on YouTube, are to help impoverished children and children who’d been exploited and became “sex slave[s].” The prelaunch of BidsThatGive appears to have been timed to coincide with the Independence Day holiday period in the United States.
One of the assertions in a the YouTube video is that the “rewards” the company provides include “an orphanage and a school, church or hospital built in your name.” All of this apparently is possible because BidsThatGive has a “global business model” and employes a “concept” known as “PPSC,” which stands for Private Profit Sharing Company.
But before we get to the uber bizarre, let’s address the run-of-the-mill bizarre in this latest entry in MLM La-La Land.
BidsThatGive is a little bit Andy Bowdoin. Indeed, the emerging penny-auction company with an MLM-style compensation plan, claims it’s not an MLM program and tells prospects they’re “probably not going to sleep at night” once they understand the profit potential. Bowdoin, the infamous AdSurfDaily Ponzi schemer, told prospects that ASD was not a “network marketing company” and used largely the same line about all the sleepless nights excited prospects would experience.
Meanwhile, BidsThatGive is a little bit like AdViewGlobal (AVG), a collapsed 1-percent-a-day Ponzi autosurf federal prosecutors said in April 2012 had ASD ties. AVG once claimed that one of its desires was to save the rainforest through charitable contributions. BidsThatGive also resembles ClubAsteria, which offered outsize weekly returns ranging from 3 percent to 8 percent and told prospects that its charitable arm would provide relief to victims of the devastating earthquake in Japan last year. ClubAsteria also purported to provide aid to children and claimed its mission was to elevate the word’s poor out of poverty.
And BidsThatGive also resembles DataNetworkAffiliates (DNA), which tied itself to the U.S. AMBER Alert system for rescuing abducted children and said its “token system” could help prevent child poverty.
“Help DNA Feed A Million. OVER 1000 AN HOUR DIE. The DNA Token System Can Prevent This!” the company exclaimed.
Among other things, DNA used a YouTube video to trade on the name of Adam Walsh, the 6-year-old who was abducted and murdered in Florida in 1981. Adam’s father, John Walsh, became a prolific advocate for children and later became the host of the “America’s Most Wanted” television series.
DNA, which was associated with longtime MLM huckster Phil Piccolo, appears not to have helped a single abducted child or a single child living in poverty. Affiliates, though, tried to plant the seed that the DNA “program” was backed by Oprah Winfrey and Donald Trump. When DNA’s CEO resigned suddenly in 2010, the company waited nearly a week to announce the departure — and then misspelled the former CEO’s name.
BidsThatGive Operator
Randy Jeffers, an MLM aficionado, is the purported operator of BidsThatGive, according to promo videos on YouTube. Jeffers also presides over a nonprofit entity known as “Liberty Kidz,” which says its “[v]ision is to empower a child to be all that he or she is created to be, by providing homes, help and hope for discouraged, displaced and distressed children of the world.”
A similarly named Jeffers’ entity known as Liberty International LLC filed for bankruptcy in August 2010, listing about $1.94 million in debt and $641 in assets, according to federal records. The assets consisted of the balance of a business checking account.
What follows are comments from Jeffers in the nine-minute sales pitch for BidsThatGive on YouTube (italics added):
You know, there are so many terrible things that happen to children all over the world. Right now a little boy is dying of hunger, a little girl just got sold by her mother and is being forced into life as a sex slave.
Right now, children are being physically abused, and then there’s so many children that are just left by themselves and there’s no one there to love or care for them. I don’t know why bad things happen to innocent little children, but they do. But here’s what I do know: All of us can do something about it.
You see, that’s our No. 1 purpose. This company was founded to be a true partnership between those children, the children’s charities that it supports and its affiliates who make it all happen.
A ‘Founding Member’
One of the founding members of BidsThatGive is Glen Woodfin, according to 6:56 promo video dated July 2 and running on YouTube.
Woodfin describes himself in the video as an American who once moved to Brazil to be with his “multimillionaire” fiance who had 90 employees. Enjoying the “good life” on the beach while sitting around drinking “coconut milk” was fun for a while, but ultimately led to a desire to become more productive and to develop an online skill set. Woodfin ultimately discovered he had a talent for search engine optimization and that clients were interested in those services.
Glen Woodfin, who says he's done SEO for a Presidential candidate, does a little dance in his Bids That Give sales pitch on YouTube.
His SEO skills ultimately became so good that “I was hired by somebody running for President . . .,” according to Woodfin, who narrates the video. He did not identify the candidate.
Woodfin, however, goes to to explain that he was fortunate to know author and White House adviser Doug Wead, who wrote “All The President’s Children,” a New York Times Bestseller. (Wead’s Wikipedia entry says he advised GOP Presidents George H.W. Bush and George W. Bush.)
Apparently in the market for SEO advice, Wead turned to Woodfin, according to the video.
“He said, ‘Glen, we’ve got one of the Presidential children about to get married in three weeks, and we don’t have a website up. Can we get in there and get to the top of the search engines with it?’” Woodfin recalled.
That Presidential child, according to Woodfin, was Chelsea Clinton, daughter of former President Bill Clinton and U.S. Secretary of State Hillary Clinton.
Over the weekend Chelsea Clinton got married, Woodfin said, his SEO techniques on Wead’s behalf put a site known as ChelseaClintonWeddingWatch.com at the top of the rankings. (Chelsea Clinton was married on July 31, 2010.)
When NBC News anchor Lester Holt was interviewing Wead, Woodfin said, Holt mentioned the website Woodfin had put at the top of the rankings, apparently attributing the feat to Wead.
Neither BidsThatGive nor Jeffers is mentioned in the first three minutes of the Woodfin video. But at roughly the 3:03 mark, Woodfin announces, “I’m going in business with a gentleman named Randy Jeffers. Randy Jeffers started the No. 1, fastest-growing MLM of all time, called Destiny. They put in 1 million distributors in 18 months.”
Woodfin goes on to say that Jeffers recently called him and offered him a “founder’s membership” in BidsThatGive.
“While he’s talking, the hair start[s] standing up on my arm, and I got thrilled,” Woodfin recalled. “As a matter of fact, every time I get off the phone with him now, I’m just, ‘Thank you for putting this together.’ It’s based on penny auctions . . .”
It’s not known whether Woodfin contacted the White House, Wead, Clinton and Holt as a courtesy to let them know he’d be using their names in a YouTube pitch for Jeffers’ BidsThatGive. What is known is that namedropping is common in the MLM sphere — often without the knowledge of those whose names are dropped.
Although the Woodfin pitch did not imply that any of the celebrities or institutions mentioned in the pitch endorsed BidsThatGive, the implication was clear that BidsThatGive prospects who joined under Woodfin would gain access to an SEO expert who’d worked for a Presidential candidate and knew a Presidential adviser.
Neither the Jeffers’ video nor the Woodfin video referenced the Liberty International LLC 23-month-old bankruptcy filing. Nor did either video address any of the potential problems BidsThatGive could encounter from regulators.
Like the Zeek Rewards’ business model, the BidsThatGive model resembles that of ASD. In 2008, the U.S. Secret Service seized more than $80 million from ASD-related bank accounts, including $65.8 million in the personal accounts of Andy Bowdoin.
Court records showed that ASD was trading on the name of then-President George W. Bush. Analysts saw it as a transparent bid to sanitize the “opportunity” by trying to link it to the White House.
Major politicians from both sides of the aisle have seen their names used in promos for “opportunities” that proved to be Ponzi schemes.
Former President Clinton’s name and image were used by the Mantria Corp. Ponzi scheme. Clinton is a Democrat.
This cash came from the Trevor Cook Ponzi scheme and was stashed, according to filings in the civil case against Cook. Cook is serving a 25-year-sentence in federal prison. Photo source: Court records.
EDITOR’S NOTE: As America’s fraud plague continues, some of the scammers are polluting the free market with incongruous and even bizarre schemes — even as they purport to represent the best that freedom offers.
The PP Blog highly recommends that readers check out this September 2011 document from the SEC that warns about scammers targeting holders of self-directed IRAs. Reading the document may help improve your understanding of the story below. There are differences between IRAs (emphasis added below):
“An Individual Retirement Account (IRA) is a form of retirement account that provides investors with certain tax benefits for retirement savings,” the SEC says. “Some common examples of IRAs used by investors include the traditional IRA, Roth IRA, Simplified Employee Pension (SEP) IRA, and Savings Incentive Match Plan for Employees (SIMPLE) IRA. All IRA accounts are held for investors by custodians or trustees. These may include banks, trust companies, or any other entity approved by the Internal Revenue Service (IRS) to act as a trustee or custodian.
“A self-directed IRA is an IRA held by a trustee or custodian thatpermits investment in a broader set of assets than is permitted by most IRA custodians,” the SEC continues. “Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs.
“Custodians and trustees for self-directed IRAs, however, may allow investors to invest retirement funds in other types of assets such as real estate, promissory notes, tax lien certificates, and private placement securities.While self-directed IRAs may offer investors access to an array of private investment opportunities that are not available through other IRA providers, investments in these kinds of assets may have unique risks that investors should consider. Those risks can include a lack of disclosure and liquidity — as well as the risk of fraud.”
Here, now, a story about how holders of self-directed IRAs allegedly had their pockets picked . . .
Meanwhile, there’s William Wise, a onetime international fugitive charged in California with a massive Ponzi scheme centering on offshore CDs. (Wise surrendered earlier this week.) And then there’s Robert Stinson Jr., the Pennsylvania Ponzi swindler now doing more than 33 years for his “Life’s Good” scam. (The FBI said he was wiring money even as a raid was under way.)
And who could forget Californian Daniel C.S. Powell, implicated by the SEC in a life-settlement scam? (The venture became known as “Christian Stanley,” and its website traded on the name of former President Bill Clinton.)
Then there’s Chris Cornett, implicated by the CFTC in a Forex swindle.
Here’s why these names are important: All of these individuals — and more — are listed as scammers or alleged scammers in a proposed class-action lawsuit against Ephren W. Taylor II, now implicated by the SEC in a massive Ponzi swindle known as “City Capital.” The alleged City Capital targets were people of faith.
Though not defendants in the Taylor/City Capital lawsuit, the other alleged (or proven) scammers all had something in common beyond their abilities to separate people from their money, according to the complaint: complicit bankers and/or a means of plowing customers’ money from self-directed IRAs (SDIRAs) into their fraud schemes.
SDIRAs are sold as freedom-celebrating devices that encourage personal responsibility and permit their holders to be more flexible in their investment choices. By law, the accounts are held by a custodian or trustee. Even so, sharks allegedly swim in these waters — and the worst of the worst may deny they have any duties to their customers and may be turning a blind eye to fraud schemes as a means of keeping a fee-generating, steady supply of fresh meat and blood in the water.
“I am encouraging our plaintiffs to raise their voices and to make their legislators and regulators aware of how Ponzi schemes continue to be perpetrated through the use of self-directed IRA investment vehicles,” said Cathy Lerman of Cathy Jackson Lerman PA, one of the firms involved the prospective class action.
Other attorney/firms involved in the litigation include California local trial counsel David Dorenfeld of Snyder Dorenfeld LLP; Michael W. Brown, an associate at Snyder Dorenfeld; and Jim Gitkin, principal of Salpeter Gitken LLP.
Among the defendants named in the Taylor class action are Bank of America; Missouri Bank and Trust of Kansas City; Equity Trust Corp. of Ohio (an SDIRA provider); Entrust New Direction IRA Inc. of Colorado; The Entrust Group of California (an SDIRA provider); Entrust Administration Inc. of California; and Sunwest Trust Inc. of New Mexico. Other defendants also are named, and there is an allegation that Taylor used as many as 50 shell companies as part of his long-running fraud.
A separate proposed class action has been filed against SDIRA providers named in the Taylor class action. That lawsuit alleges that as much as $94 billion may be tied up in SDIRAs nationwide, suggesting that fresh meat and blood could churn in the waters indefinitely.
In effect, the lawyers are arguing that SDIRAs, which are lightly regulated or not regulated at all, have become the tools of criminals and are being used to separate investors from their money in one scam after another. Unlike traditional IRAs, SDIRA vessels may end up steering vast sums of cash into “opportunities” that not only may be exceptionally risky, but also may be downright crazy — such as Taylor’s purported “sweeps machines.”
The Taylor lawsuit, for instance, argues that African American Christians effectively found themselves owning machines used in illegal gambling parlors and that churches that had invited Taylor to speak also got swept into incongruous schemes.
Liberty City Church of Christ in Miami lost $100,000, owing to Taylor’s scams, the lawsuit contends. William Lee of Raleigh, N.C., got duped of $160,000 because Taylor and associates caused him to believe he was making a “socially conscious” investment that would help the public at large while at once resulting in an individual profit.
The same thing happened to Gennet Thompson of Delray Beach, Fla. Thompson entrusted $17,200 to Taylor in one “opportunity” and $10,500 in another, according to the complaint.
Trudy Morgan of Lithonia, Ga, had a similar experience — one that sucked away $30,000, according to the complaint.
Screen shot: Troy Wragg, whom the SEC said was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting on the Clinton Global Initiative in New York on Sept. 25, 2009.
URGENT >> BULLETIN >> MOVING: Using direct, no-nonsense language, U.S. District Judge Christine M. Arguello has ruled Mantria Corp. a Ponzi scheme that operated with “sociopathic greed” to defraud investors of millions of dollars.
Some investors were encouraged to drain equity in their homes to invest with Mantria, according to the ruling.
The ruling was a straight-line win for the SEC, which charged the firm, its principals and chief pitchman in November 2009 amid allegations that Mantria had orchestrated a colossal fraud targeted at people interested in “green” energy and protecting the environment. Mantria executives Troy Wragg and Amanda Knorr were charged in the caper, as was pitchman Wayde McKelvy of an entity known as “Speed of Wealth LLC.”
Arguello found that Mantria had scammed more than $54.5 million “by egregiously, recklessly, knowingly, and shamelessly perpetrating a fraudulent scheme” that used “misrepresentations, omissions, and blatant lies to induce unsuspecting and unwitting victim investors to liquidate the equity in their homes and take out bank loans to invest in Defendants’ scheme, which was nothing more than smoke and mirrors.”
The judge’s ruling specifically points to internal Mantria emails uncovered by the SEC during the probe.
One email from Wragg to McKelvy read, “Mantria Speed of Wealth = MSOW = Many Souls Owe Wayde.” Another from McKelvy to Wragg allegedly touting seminar registrations and a new crop of suckers read, “110 registered for tonight 75% names I don’t recognize. Let’s blow them away my brother!” An email attributed to Knorr read, “Let’s just make some f*****g money.”
Mantria traded in part on the name of former President Bill Clinton, who once presented Wragg an award for commitment to the environment. Prospective investors were shown a video that included footage of Clinton and other famous politicians and business figures.
Fraud schemes often spread virally by planting the seed that famous people endorse the “opportunities” when they do not. In fraud case case after fraud case, celebrity endorsements, which are used to disarm skeptics and create positive feelings, have been manufactured out of wholecloth.
In the alleged AdSurfDaily Ponzi scheme, for instance, the U.S. Secret Service said promoters claimed that ASD President Andy Bowdoin had received an important award from then-President George W. Bush. The “award” actually was a memento for campaign donations to the National Republican Congressional Committee, according to court filings.
The Secret Service is known to have seized a significant volume of email during the ASD probe. Some of it has been described in court filings as incriminating to Bowdoin.
Reporters who emailed McKelvy for comment after the SEC brought it charges against Mantria and Speed of Wealth received invitations to join the Trump Network multilevel-marketing opportunity.
“YOU MUST START YOUR OWN BUSINESS Renee!” McKelvy advised a reporter in one email, according to the Denver Business Journal. “What You Have Been Taught About Building Wealth is DEAD WRONG!”
Mantria CEO Troy Wragg in a music video by ICEBLOC.
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:
Mantria Realty LLC
Mantria Communities Inc.
Mantria Real Estate Opportunities Group LLC
Mantria Investments LLC
Mantria Financial LLC
Mantria Capital Advisors LLC
Mantria Industries LLC
Carbon Diversion Inc.
Mantria Records LLC
The Mantria Foundation Inc.
Mantria Realty FL LLC
Mantria Communities LP
Mantria Real Estate Opportunities Group I LP
KITN Investments LLC
The Mantria Renewable Energy Fund LP
The Mantria Place Renewable Energy Site Development LP
The Mantria Industries Hohenwald Tennessee Eco-Industrial Center Site Development L.P.
Earth Mate Technologies LLC
Clean Energy Components LLC
EternaGreen Capital LLC
The EternaGreen International Carbon Economy Network LLC
EternaGreen University
EternaGreen Global Corporation
C&M Industrial Center LLC
Mantria Industries II LLC
Carbon Diversion Carlsbad New Mexico Manufacturing Plant LLC
Indian Trail Estates LLC
Mantria Village LLC
Mantria Bluffs LLC
IronBridge Properties LLC
Legacy Ridge LLC
Iris Village LLC
Mantria Place LLC
The Mantria Group LLC
Mantria Indian Trail Development LLC
Indian Trail Estates Phase I LLC
Indian Trail Estates Phase II LLC
Indian Trail Estates Phase III LLC
Indian Trail Estates Homeowners Association Inc.
Legacy Ridge Homeowners Association Inc.
The Mantria Place Homeowners Association Inc.
SOW Trust Deed LLC
SOW Hard Money Loans Investment Club LLC
SOW Hard Money Loans II LLC
SOW Trust Deed Group II LLC
Trust Deed Group I LLC
SOW Hard Money 50 Economic Stimulus Investment Club LLC
SOW Mantria Income LLC
SOW Mantria Diversification LLC
SOW Mantria 5% LLC
SOW Mantria Place 25% LLC
SOW Mantria 25% LLC
Speed of Wealth Investments Gold Club LLC
Trust Deed 3.0 LLC
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.
Two months after Troy Wragg accepted a kudo from former President Bill Clinton for environmentally friendly business practices, Wragg was implicated by the SEC in an alleged "green" Ponzi scheme. The Financial Industry Regulatory Authority (FINRA) later issued an Investment Alert warning the public about a relatively new form of fraud: “green energy investments†that trade on investors’ affinity for keeping the planet clean.
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.
As the year of the Ponzi scheme comes to a close, the Financial Industry Regulatory Authority has issued an Investment Alert warning the public about a relatively new form of fraud: “green energy investments” that trade on investors’ affinity for keeping the planet clean.
Such schemes “promise large gains from investing in companies purportedly involved in developing or producing alternative, renewable or waste energy products,” FINRA said.
Among the companies it cited in its fraud alert was Philadelphia-based Mantria Corp., accused by the SEC last month of operating a Ponzi scheme pushed by Colorado-based Speed of Wealth LLC.
“Right now there are a lot of legitimate stories in the news about green energy initiatives, and con artists want to leverage people’s interest in green energy to make a quick buck at investors’ expense,” said John Gannon, FINRA senior vice president for Investor Education. “There is a lot of interest in companies that claim to provide green energy, but we issued this Alert to remind investors to be vigilant about avoiding investment scams, no matter how they are packaged.”
Citing the SEC’s Mantria case, FINRA said environmentally conscious investors should pay strict attention to how they’re approached in sales presentations. Language and hype used in pitches can provide important clues that a “fashionable hook” is being used to pick investors’ pockets.
“[T]he Securities and Exchange Commission alleges that promoters of purported eco-friendly investment opportunities lured 300 investors into a $30 million Ponzi scheme, encouraging participants to finance such ‘green’ initiatives of Mantria Corporation as a supposed ‘carbon negative’ housing community in rural Tennessee and a ‘biochar’ charcoal substitute made from organic waste,” FINRA said.
“Investors were falsely promised returns ranging from 17 percent to ‘hundreds of percent’ annually, FINRA continued, citing the SEC allegations. “The scammers encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds, and mutual funds. Investors also were urged to borrow as much as possible against their home or business so that they could invest in Mantria. But, according the SEC’s complaint, Mantria did not generate any income from which such extraordinary returns could be paid.”
FINRA also cited other examples of alleged “green” fraud.
“One solar panel stock, for example, was touted as ‘set for a 200% gain,’” FINRA said. “A different stock in a China-based wind-power company was extolled as a ‘one in a million’ opportunity that could quickly climb to ’51X its current level.’
“In another instance,” FINRA continued, “an investment-related blog praised a company with a hydrogen-based solution, claiming the stock ‘soared 500% in one week’ and suggesting a nexus between federal energy research and the company’s prospects for growth. Specifically, the blogger noted: ‘The U.S. Government has a hydrogen initiative. Billions are being spent on hydrogen technologies. [The company] is again at the right place at the right time.’”
FINRA’s alert advises investors “to ignore unsolicited investment recommendations and to question the source of investment information. Investors should also be wary of investments that claim to be the next big thing and promise exponential returns.”
EDITOR’S NOTE: The story below references a column by Renee McGaw in the Denver Business Journal. Make sure you read the column. The link is at the bottom of this story.
The column reminded us of what occurred in the opening hours of the prosecution against the assets of Florida-based AdSurfDaily Inc., accused in August 2008 of operating a $100 million Ponzi scheme. Reporters who called ASD got a recording featuring the voice of ASD President Andy Bowdoin and intoning that God was on the company’s side.
Within hours, Bowdoin’s supporters were complaining on Internet forums that the media refused to take ASD’s side of the story seriously. Rather than questioning why the media might find such a recording important enough to mention in stories, Bowdoin’s apologists then sought to discredit reporters by casting them as conspirators in a plot to defame Bowdoin and to discredit members of law enforcment by painting the government as “evil.” The attack even featured a campaign to have a Florida television station and Florida Attorney General Bill McCollum charged with Deceptive Trade Practices for daring to raise the issue of the legitimacy of ASD.
McGaw’s column on a Colorado company, Speed of Wealth LLC, is remarkable in a number of ways, perhaps principally in the sense that it shines a light on relentless email pitches to join online money-making “opportunities.” Not even serious Ponzi scheme allegations against Speed of Wealth principal Wayde McKelvy prevented McGaw from receiving pitches for other programs from him. The column leaves us with this question: Is it any wonder that much of America and the world views Internet Marketing as a vast wasteland filled with fraudsters and schemers?
On a side note, readers of the PatrickPretty.com Blog occasionally have chided us about our view that exclamation points should be used like garlic — sparingly. We’ve enjoyed the banter on the topic. McGaw’s column also raises the issue of exclamation points in marketing pitches.
Here, now, the story . . .
Denver Business Journal reporter Renee McGaw says she is being pounded with offers from Wayde McKelvy, a defendant in a Ponzi scheme lawsuit filed by the SEC last month.
McKelvy’s Colorado firm, Speed of Wealth LLC, was accused by the SEC of pitching a “green” Ponzi scheme for Mantria Corp. of Pennsylvania. The names of President Obama, former President Clinton and Secretary of State Hillary Clinton were prominently featured in a Mantria video that played on the Speed of Wealth website. The video, now missing from the site, was based on events that occurred in September at the annual meeting of the Clinton Global Initiative (CGI), one of President Clinton’s signature undertakings after he left the White House in January 2001.
McKelvy describes himself as a wealth coach — and not even the assertion he was part of a $30 million fraud has slowed him down, McGaw reports.
In a column yesterday, McGaw said she sent McKelvy an email Nov. 16 to inquire about the SEC allegations. (The SEC had brought the allegations earlier on the same day.) McGaw’s email to McKelvy triggered what she described as automated pitches describing her as a “fellow Wealthalete” and urging her to join money-making programs.
“I am totally focused on one thing right now which I believe will be very, very fun and the opportunity to put money in your pocket by owning you’re own business with the help of ‘The Donald’,†McGaw quoted McKelvy as writing in an email Nov. 18, two days after the SEC filed civil charges against McKelvy, his former wife, and Mantria officers Troy Wragg and Amanda Knorr.
The columnist noted she did not correct McKelvy’s spelling or punctuation when reproducing the email for readers of the Denver Business Journal.
“Yes, I am talking about the ‘Trump Network,’†McKelvy stressed to McGaw.
McGaw reported that McKelvy’s pitches often featured subject lines consisting of all capital letters and ending with exclamation points.
“YOU MUST START YOUR OWN BUSINESS Renee!†McKelvy advised McGaw in one email. “What You Have Been Taught About Building Wealth is DEAD WRONG!â€
Through the Mantria video, Speed of Wealth also dropped the names of 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.
All of the individuals were among the prominent attendees of President Clinton’s CGI function. The video featured footage of Wragg appearing on stage next to Clinton.
Mantria was a “supposed ‘carbon negative’ housing community in rural Tennessee,†the SEC said.
Screen shot: Troy Wragg, whom the SEC said was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting on the Clinton Global Initiative in New York on Sept. 25.
But the “green†representations “were laced with bogus claims, and investors were falsely promised enormous returns on their investments ranging from 17 percent to ‘hundreds of percent’ annually,†the SEC said.
The agency charged that “Mantria’s environmental initiatives have not generated any significant cash, and any returns paid to investors have been funded almost exclusively from other investors’ contributions.â€
“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.â€
It what may become an embarrassment to President Obama, Former President Clinton and Secretary of State Hillary Clinton, a man the SEC now says was operating a $30 million Ponzi scheme appeared alongside President Clinton at the 5th Annual Meeting of the Clinton Global Initiative (CGI) in New York Sept. 25.
Obama’s name and the names of both Clintons were dropped in a video on the website of Speed of Wealth LLC, a Colorado company accused today of promoting the scheme for Mantria Corp. of Pennsylvania. Other names dropped on the site included 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.
All of the individuals were among the prominent attendees of President Clinton’s CGI function.
There are no assertions that any of the politicians, prominent business executives or celebrities who attended the CGI event had any knowledge of the alleged scheme. But Troy Wragg, CEO of Mantria Corp., one of the companies accused in the scheme, appeared next to President Clinton and Secretary of State Clinton on the stage in New York.
The Speed of Wealth video featured snap shots of famous people who attended the CGI event. It concluded with Bill Clinton’s remarks recorded on video, with Wragg, other attendees and the Clintons in a group pose.
Speed of Wealth was a sales outlet for the Mantria scheme, the SEC charged today.
Screen shot: Troy Wragg, whom the SEC said today was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting of the Clinton Global Initiative in New York on Sept. 25.
Mantria Corp.’s 28-year-old chairman and CEO, Troy Wragg, whom the SEC said was “employed as a manager for a small janitorial services company” prior to getting into the Ponzi business, was prominently featured in a video on Speed of Wealth’s Website.
In the video, Wragg is standing next to President Clinton, who had acknowledged Mantria for its environmental commitment at the CGI event Sept. 25.
Mantria even got a mention in a CGI news release after committing “to help mitigate global warming through the use of its Carbon Fields site, where Mantria will perform trials on their product BioChar, a carbon-negative charcoal, to prove how this product can sequester carbon dioxide, improve soil quality when buried, and reduce emissions in developing countries.”
Today in Denver, however, the SEC said BioChar was part of the alleged Ponzi scheme, which may involve $30 million or more.
Despite claims 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,” the SEC said, “Mantria has never sold any biochar and has just one facility engaged in testing biochar for possible future commercial production.”
One SEC official said there was little “green” about the firm, except perhaps for its love of money.
“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.”
Charged today were Speed of Wealth and two of its executives: Wayde McKelvy of Sunny Isle Beach, Fla., and Donna McKelvy, of Parker, Colo.
Also charged were Mantria and two of its executives: Wragg, who lives in Philadelphia, and Amanda Knorr, also of Philadelphia.
Wayde and Donna McKelvy previously were married, and “particularly targeted elderly investors or those approaching retirement age to finance such ‘green’ initiatives,” the SEC said.
Mantria was a “supposed ‘carbon negative’ housing community in rural Tennessee,” the SEC said.
But the “green” representations “were laced with bogus claims, and investors were falsely promised enormous returns on their investments ranging from 17 percent to ‘hundreds of percent’ annually,” the SEC said.
The agency charged that “Mantria’s environmental initiatives have not generated any significant cash, and any returns paid to investors have been funded almost exclusively from other investors’ contributions.”
UPDATED 11:08 A.M. ET (U.S.A.) On a day Americans cherish as a great symbol of the continuation of Democracy, images of their President are being used to create the impression he has endorsed a “program” HYIP hucksters sought to popularize in the aftermath of the August 2012 collapse of the Zeek Rewards “program” amid SEC allegations that Zeek was just another massive Internet scam.
For starters, Zeek affiliates being approached by upline sponsors and email/website appeals to send in money “to defend Zeek Rewards and all of our independent businesses as per our legal rights of due process” might want to read this 
