Commercial Biochar company charged with running Ponzi scheme.

[jim thomas]

Ever thought biochar claims were false and overinflated? turns out the
SEC agrees.

And these guys think they can be trusted with CDM credits????

Jim

------

http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE5AF50W20091116

SEC files charges over "green" Ponzi scheme
Mon Nov 16, 2009 4:12pm EST
By Jonathan Stempel

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission
charged four individuals and two companies with running a $30 million
Ponzi scheme that targeted elderly investors and people nearing
retirement who were seeking environmentally friendly investments.

In a civil lawsuit filed Monday in Denver federal court, the SEC
accused Mantria Corp of Bala Cynwyd, Pennsylvania and its principals
Troy Wragg and Amanda Knorr of raising $122 million from more than 300
investors nationwide in a dozen fraudulent securities offerings.

The SEC said Mantria enlisted Speed of Wealth LLC, a Centennial,
Colorado firm run by Wayde and Donna McKelvy, to encourage investors
to liquidate retirement plans and home equity, and buy securities
offering returns of 17 percent to "hundreds of percent" annually.

It said the McKelvys encouraged victims through seminars, the Internet
and phone calls "to move at the speed of wealth" to invest in
Mantria's securities, receiving a 12.5 percent commission for their
efforts.

According to the SEC, Mantria purported to use the securities to
finance such projects as a "carbon negative" housing community in
rural Tennessee, and production of "biochar," a charcoal substitute
made from organic waste.

Instead, it said Mantria overstated its own investment success, and
used much of the proceeds from new investments to repay earlier
investors.

"The only green these promoters seemed interested in was investors'
money," said Don Hoerl, director of the SEC regional office in Denver,
in a statement.

The SEC charged Mantria, Speed of Wealth, Wragg, Knorr and the
McKelvys with fraud and the sale of unregistered securities. It is
seeking the return of illegal profits, civil fines, and a freezing of
the defendants' assets.

According to the regulator, Wragg, 27, and Knorr, 26, live in
Philadelphia; Wayde McKelvy, 46, lives in Sunny Isles Beach, Florida;
and Donna McKelvy, 43, lives in Parker, Colorado.

A lawyer for Mantria, Wragg and Knorr did not immediately return a
call seeking comment. The McKelvys could not immediately be located
for comment, and it was unclear whether they or Speed of Wealth had
retained counsel.

The case is SEC v. Mantria Corp et al, U.S. District Court, District
of Colorado.

(Reporting by Jonathan Stempel; Editing by Phil Berlowitz)


------

New York Times - November 16, 2009, 5:00 PM

http://greeninc.blogs.nytimes.com/2009/11/16/regulators-file-lawsuit-against-alleged-green-investment-ponzi-scheme/

Regulators File Lawsuit Against Alleged ‘Green’ Investment Ponzi Scheme

By DIANA B. HENRIQUES

“The only green these promoters seem interested in was investors’
money,” an official of the Securities and Exchange Commission said of
a green investment scheme. The agency filed a lawsuit, above, on Monday.
Federal regulators have accused four people and two companies of using
bogus claims about “green initiatives” to entice more than 300
investors into what was really a $30 million Ponzi scheme.

The accusations were made in a civil lawsuitfiled on Monday in federal
court in Denver by the Securities and Exchange Commission.

According to the complaint, the fraud scheme’s promoters targeted
elderly investors and those nearing retirement age. Investors were
told they could reap substantial returns from such “green” initiatives
as the development of “carbon negative” housing in rural Tennessee and
the production and marketing of “bio char,” a charcoal substitute made
from organic waste.

In fact, regulators say, the private company in which investors sank
their money had almost no assets or operations and the promoters were
paying the promised returns to early investors with money collected
from those who invested later — a classic Ponzi scheme.

“The only green these promoters seemed interested in was investors’
money,” said Don Hoerl, director of the commission’s Denver office.


The individual defendants are Wayde McKelvy, of Sunny Isle Beach,
Fla.; his ex-wife Donna McKelvy, of Parker, Colo.; Troy Wragg, and
Amanda Knorr, both of Philadelphia.

In addition, the lawsuit names two companies, the Mantria Corporation
in Bala-Cynwyd, Pa., run by Mr. Wragg and Ms. Knorr; and Speed of
WealthL.L.C. in Centennial, Colo., a “wealth education” program
founded by the McKelvys.

A lawyer for Mr. Wragg, Ms. Knorr and Mantria did not immediately
respond to messages left at his office. No lawyer was identified for
the McKelvys, but they did not respond to messages left at their Web
site, nor to voicemail.

Update | Nov. 18 Christine Gresh, the executive administrative
assistant to the chairman and chief executive of Mantria, wrote in an
e-mail message:

We are aware of the SEC action in Denver. We deny all the allegations
raised by the SEC against Mantria and its principals and we are
preparing our defense. We hope to obtain a favorable resolution of
this matter.

According to Mr. Hoerl’s office, investors had been encouraged through
seminars and “webinars” to liquidate their retirement plans, mutual
funds and home equity to invest in Mantria’s phony environmentally-
friendly operations.

Speed of Wealth operates live “wealth education” seminars in various
states, as well as online seminars, telephone conference calls and
Internet radio programs. According to the S.E.C.’s complaint, however,
Speed of Wealth’s primary purpose since September 2007 has been to
solicit investors to buy Mantria’s unregistered securities offerings.

Regulators contend that Mr. Wragg and Ms. Knorr would participate in
the Speed of Wealth seminars and other sales efforts, providing
investors with a nearly fictional account of Mantria’s operations and
prospects.

Regulators are seeking an injunction to block further activity by the
defendants, as well as financial penalties and recovery of illegal
profits.

The case was developed with the assistance of the division of
securities in the Colorado Department of Regulatory Agencies. The
investigation is continuing, regulators in Denver said.


see also the Securities exchenge commission release here:
http://www.sec.gov/news/press/2009/2009-247.htm



http://patrickpretty.com/2009/11/17/federal-judge-issues-restraining-order-asset-freeze-in-alleged-mantria-ponzi-scheme-video-featuring-president-obama-former-president-clinton-and-world-business-leaders-pulled-from-speed-of-wealth/

Federal Judge Issues Restraining Order, Asset Freeze In Alleged
Mantria Ponzi Scheme; Video Featuring President Obama, Former
President Clinton And World Business Leaders Pulled From 'Speed Of
Wealth' Website
By admin on November 17th, 2009
In a day of notable irony, the Obama administration announced the
creation of an Interagency Financial Fraud Task Force led by the
Department of Justice. Critical support functions will be provided by
the Treasury Department, the Department of Housing and Urban
Development and the Securities and Exchange Commission.

One of the first cases the new Task Force may find itself discussing
is the alleged Mantria Corp. Ponzi scheme - a scheme in which a video
featuring an image of President Obama and recorded remarks by former
President Clinton was used in marketing materials by the alleged
schemers.
Even as the Task Force announcement was being made, the SEC was
announcing that a federal judge had granted a Temporary Restraining
Order and asset freeze in the alleged "green" Ponzi operated by
Mantria Corp. of Pennsylvania and sold by Speed of Wealth LLC of
Colorado.
Within minutes, a video featuring a snapshot of President Obama and
recorded remarks by President Clinton at the Clinton Global Initiative
(CGI) annual meeting in New York Sept. 25 went missing from Speed of
Wealth's website. Meanwhile, the Mantria website defaulted to a
message that read, "We Are Rebuilding this Site to Make it the Most
Informational Site Possible. Please check back with us in 10 days."
Only yesterday the Mantria website showcased a PDF that appeared to
have been assembled in part from CGI press materials to spotlight
President Clinton's efforts to improve the world.
The Speed of Wealth video, a marketing prop that dropped the names of
famous politicians and international celebrities such as former U.N.
Secretary General Kofi Annan and actor Matt Damon, still had been
accessible this morning.
That changed quickly after the announcement of the TRO and asset
freeze. The SEC announced civil charges against Speed of Wealth and
Mantria yesterday. Speed of Wealth's video highlighted Mantria's
purported devotion to the environment, under the headline "Mantria
Honored by President Bill Clinton and Secretary of State Hillary
Clinton."
In the video, Mantria CEO Troy Wragg appeared on the stage next to
President Clinton, Secretary of State Clinton and others. CGI had
lauded Mantria for helping to "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."
Regulators said yesterday that BioChar was part of a $30 million Ponzi
fraud.
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."
Others featured in the Speed of Wealth video included President
Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart and
Muhtar Kent, CEO of the Coca-Cola Co.
All of the individuals were among the prominent attendees of President
Clinton's CGI function.
It is not unusual for companies to promote themselves by trying to
establish ties to prominent figures. AdSurfDaily, a Florida company
accused by the U.S. Secret Service and federal prosecutors of
operating a $100 million Ponzi scheme, was featured in promotions that
claimed company President Andy Bowdoin had received a special award
for business achievement from President George W. Bush.
Prosecutors said the claim was false. What ASD promoters had called an
important award from the White House, investigators called a souvenir
for donations to the National Republican Congressional Committee.
What was unusual about the Speed of Wealth video is that it
shamelessly dropped so many names of well-known people who attended
the CGI event, a dignified function hosted by President Clinton that
annually draws global political and business leaders.
Some of the snap shots used in assembling the video appeared to have
been pulled from media materials on CGI's website.
Along with showcasing the video cobbled together from one of President
Clinton's signature events, the Speed of Wealth website announced what
it described as "the Partnership of the Century!" between itself and
Mantria.
Speed of Wealth said money was to be made while itself and Mantria
were saving the environment and "helping Middle America secure its
financial future!"
Topics covered included:
0. Why investing in foreclosures today will make
you rich and the only way you should be doing it is sitting on the
beach in Bermuda while your foreclosure empire grows.
0. How to build $2,000,000 dollars of wealth
with absolutely no money out of your pocket ever.
How to easily receive up to 25% returns on your money
annually in an investment that I believe to be safer than a bank CD..

[Dan Whaley]

I think it's a little disingenuous to conflate a couple of sham artists running a ponzi scheme with the efforts of those serious individuals in the biochar community. 

It's like saying "Some lawyers are shysters, therefore they all are."  Aristotle called it "secundum quid" and identified this as one of his 13 most common fallacies.  It's also known as the hasty generalization.

Dan

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[jim thomas]

Dan 

Yes, of course there are well-meaning biochar proponents. 

Nor is this just one isolated rotten apple.

You may recall that a number of groups also had to complain to SEC about the  claims that Planktos were making to investors, misrepresenting the legal situation on ocean fertilization and pretending that their voluntary self-issued carbon credits were CER's and tradable on the European exchange. see http://www.icta.org/doc/Planktos-%20letter%20to%20SEC_final.pdf

The relevant point is that once again we are seeing that geo-engineering is proving an attractive arena for have-a-go profiteers willing to play fast and loose with unverifiable "green" claims to attract gullible investors. Probably there will be more such stories bobbing up...

This should matter a lot to people on this list. So long as commerical interests driven by their own bottom line are active in shaping geoengineering as a field, its going to be very hard to achieve fair, equitable and open governance arrangements over this powerful technology and one might expect even more 'shysters' as you call them turning up once federal and other public funds begin to flow to this field. 

Jim

Jim Thomas

ETC Group (Montreal)

j...@etcgroup.org

+1 514 2739994

[Dan Whaley]

Jim,

Shysters are everywhere that money is.  And in this geoengineering is no different than cleantech, automobiles or vaccum cleaners.

What was disingenuous was your statement "Ever thought biochar claims were false and overinflated? turns out the SEC agrees."

You conflate the SEC's investigation of two companies' bad practices with "biochar's claims".

This is a gross misrepresentation of the articles you cite.  The SEC was making no comment whatsoever about "biochar claims", i.e. with regard to the field in general.  They were announcing an investigation of Mantria Corp and Speed of Wealth LLC.

Dan

[Dan Whaley]

Posting jim's reply... which did not get picked up ...


From: Jim Fournier <jim.fo...@gmail.com>
To: Dan Whaley <dan.w...@gmail.com>
Cc: j...@etcgroup.org,
geoengineering <geoengi...@googlegroups.com>,
david shearer <davidsh...@gmail.com>,
Lopa Brunjes <lo...@biocharengineering.com>
Message-Id: <5635ED38-B777-4AC5...@gmail.com>


Dan,

Thanks for cc'ng me though I doubt my reply will go back to the geo
list. For anybody who doesn't know, I have been in biochar for five
years and represent one of the few companies in the space.

At this point the biochar community is just that, more a community
than an industry. Its mostly researchers and a few small companies
still just on the verge of an early market.

Mantria was not part of that. The rest of the community was feeling
increasingly threatened by them, not just because they were throwing
around a lot of money, but because they were making a product that
could endanger the credibility of the entire biochar effort if it
proved not to work, which seems more than likely. EternaGrenn is
(was?) made under pressure, which caused tars to be forced into the
interstices of the char, giving it very low adsorption, which is
perhaps the single biggest factor in biochar's soil fertility effect.
In addition, their material contained so much oxygen in the condensed
volatiles that it would have a much lower carbon sequestration value
per ton, further muddying the waters for biochar in general. On top of
that the whole organization seemed to be willfully ignorant of science
and of the view the rest of the community held toward them, as they
pushed outlandish claims in the media backed by lots of cash.

I had joked that it was a Ponzi scheme because of their behavior, but
at this point I can't tell if that was actually true of Mantira, or
only the parent company, Speed of Wealth. But Mantria itself did
engage in pyramid marketing style behavior such as their infamous $20k
4-day "Biochar University" weekend with no credible scientific
faculty, because none would participate. They also put up an elaborate
biochar sales site, BiocharBrokers, which offered to take orders, but
never shipped, especially to other scientists who wanted to analyze
their char.

There has been an urgent effort within the IBI to convene a technical
committee to define biochar, I suspect in large part to defend against
the damage that Mantria was preparing to do to biochar if they did
sell a lot of EternaGreen and it then failed to preform as well as
virtually any other biochar would.

So, at this point I believe the whole community is relieved that
Mantria has not done any more serious long-term damage to the
reputation of biochar and that this has come to light now sooner than
later. If people have associated Mantria's outlandish and often bogus
but well publicized claims with biochar in general, I don't blame them
for being skeptical, we are too, but there was very little we could do
about it when they had all that cash and no shame.

best,
-j


Jim Fournier
President
Biochar Engineering Corp
701 Pine Ridge Road #3
Golden CO 80403
303-279-3776 office
303-279-3734 fax
http://biocharengineering.com

On Nov 18, 2:13 pm, Dan Whaley <dan.wha...@gmail.com> wrote:
> Jim,
>
> Shysters are everywhere that money is.  And in this geoengineering is no
> different than cleantech, automobiles or vaccum cleaners.
>
> What was disingenuous was your statement "Ever thought biochar claims were
> false and overinflated? turns out the SEC agrees."
>
> You conflate the SEC's investigation of two companies' bad practices with
> "biochar's claims".
>
> This is a gross misrepresentation of the articles you cite.  The SEC was
> making no comment whatsoever about "biochar claims", i.e. with regard to the
> field in general.  They were announcing an investigation of Mantria Corp and
> Speed of Wealth LLC.
>
> Dan
>
> On Wed, Nov 18, 2009 at 2:01 PM, jim thomas <j...@etcgroup.org> wrote:
> > Dan
>
> > Yes, of course there are well-meaning biochar proponents.
>
> > Nor is this just one isolated rotten apple.
>
> > You may recall that a number of groups also had to complain to SEC about
> > the  claims that Planktos were making to investors, misrepresenting the
> > legal situation on ocean fertilization and pretending that their voluntary
> > self-issued carbon credits were CER's and tradable on the European exchange.

> > seehttp://www.icta.org/doc/Planktos-%20letter%20to%20SEC_final.pdf

> >>http://greeninc.blogs.nytimes.com/2009/11/16/regulators-file-lawsuit-...

> >>http://patrickpretty.com/2009/11/17/federal-judge-issues-restraining-...

>
> >> Federal Judge Issues Restraining Order, Asset Freeze In Alleged
> >> Mantria Ponzi Scheme; Video Featuring President Obama, Former
> >> President Clinton And World Business
>

> ...
>
> read more »