Green Energy Ponzi Scheme
(What You Need to Know)
In August, the AARP published a podcast called “Garbage Into Gold.” It is a telling of the Mantria Corp green energy Ponzi Scheme that bilked investors out of millions of dollars. Notably, Saltz Mongeluzzi Bendesky P.C. helped clients obtain the $6 million settlement in a class action lawsuit brought against third-party advisors of the company, including law firms, accounting firms, and tax firms. In this article, our class action lawyers provide a comprehensive overview of the key things to know about the Mantria Corp Green Energy Ponzi Scheme.
Background: Mantria Corp Used Green Energy Products and Services to Lure Investors
Mantria Corporation was an investment entity that, in the late 2000s, defrauded hundreds of investors out of tens of millions of dollars. The scheme revolved around promises of high returns on investments in “green” technologies. Most notably, the top executives at Mantria Corp, including Troy Wragg and Amanda Knorr, touted a process referred to as “biochar” that could supposedly turn household waste into charcoal-like material that could serve as a renewable fuel source. In other words, they touted themselves as a company that effectively turned garbage into gold.
Investors were promised strong returns. In effect, Mr. Wragg and another named defendant—Wayde McKelvy—traveled to investment seminars all around the country. They pumped up prospective investors by emphasizing the truly transformative potential of their technology—stating that Mantria would be the next Apple or Microsoft. More than 500 people—most of whom were near retirement or already retired—invested more than $50 million into the company. Many of the investment fraud victims were from Colorado. It initially appeared that the company was generating significant profits—or at least it did on paper.
SEC: Mantria Corp Scammed Investors Out of More than $54 Million
However, the purported profits were largely non-existent. The vast majority of “revenue” that Mantria Corporation generated was merely the funds that were coming in from new investors. In other words, the company operated a traditional Ponzi scheme, with money being shuffled around between investors and siphoned off by the perpetrators. In 2009, the Securities and Exchange Commission (SEC) filed a civil lawsuit against Mantria Corporation, Troy B. Wragg, Amanda E. Knorr, and other related individuals and entities.
The Perpetrators Were Eventually
Sentenced to Prison
While justice was a long time coming in this case, the main perpetrators of the Mantria Corporation green energy Ponzi scheme were eventually sentenced to prison. As noted by the Department of Justice (DOJ), Mantria founder Troy B. Wragg, 37 years old from Philadelphia, was sentenced to 22 years in prison in 2019. In 2021, NBC 10 Philadelphia reported that Wayde McKelvy was himself sentenced to 18 years in prison. For her part, Amanda Knorr was previously sentenced to serve 30 months in federal prison. As part of the sentencing, the DOJ noted that Mr. Wragg brazenly attempted to pull off a second investment fraud—an online dating service—after the green energy Ponzi scheme had already failed.
Third Parties Held Liable through a Class Action
For investors who sustained losses through a Ponzi scheme or another form of securities fraud, getting full and fair financial compensation can be challenging. One of the primary problems is that the perpetrators often lack the resources to cover all of the damages by the time the Ponzi scheme falls apart. That is exactly what happened in this case. A $54 million Ponzi scheme, Mantria Corporation reportedly returned $17 million to early investors but had less than $1 million in assets by the time the SEC took enforcement action.
Fortunately, additional compensation was recovered against third parties that played a role in allowing the Ponzi scheme to become as big as it did. Indeed, our law firm helped clients obtain a $6 million class action settlement on behalf of hundreds of investors who lost funds in the Ponzi scheme. The class action claim was brought against a number of different third parties that supported Mantria Corporation, including a Philadelphia-based law firm, a Philadelphia-based accountant, another accounting firm in Pennsylvania, and a tax law firm in Colorado.