They promised to make their investors "stinkin', filthy rich" with high-risk bets on real estate and green energy.
Instead, federal prosecutors said, the cofounders of a company in the Philadelphia suburbs lined their pockets to the tune of $54.5 million in an elaborate Ponzi scheme.
Troy Wragg, 34, and Amanda Knorr, 32, cofounders of Bala Cynwyd-based Mantria Corp., were charged with multiple counts of conspiracy and fraud in an federal indictment unsealed Thursday.
Along with a third man, Wayde McKelvy, 52, who was also charged Thursday, prosecutors say, they encouraged investors to drain their retirement and mutual fund accounts to funnel money into empty projects with promises of yields as high as 484 percent.
"Unfortunately for the investors, it was all a hoax," U.S. Attorney Zane David Memeger said in a statement Thursday. "These defendants preyed on the emotions of their victims and sold them a scam."
It was not immediately clear Thursday whether Wragg, Knorr, and McKelvy had retained attorneys.
The indictment comes six years after the U.S. Securities and Exchange Commission filed a securities fraud lawsuit against Mantria in Colorado, shut the company down, and obtained a court order barring company principals from raising new funds.
Various people formerly linked to Mantria agreed to a $6 million settlement with investors last year.
Thursday's court filings paint McKelvy as Mantria's pitchman, luring investors in flashy seminars he called "Speed of Wealth clubs" in ads on television, radio, and the Internet.
He hired celebrities, including NFL Hall of Fame player John Elway, to draw crowds to his seminars, where he outlined Mantria projects, including what he described as a 4,500-home development in Tennessee, and a $3.2 million plant in Dunlop, Tenn., to produce "biochar," a charcoal substitute made from consumer waste.
Mantria was "on the cusp of a revolutionary technology that's going to change the world," McKelvy is quoted in court filings as telling potential investors in a May 2009 seminar. "You guys can benefit from it by putting money in and getting stinkin' wealthy."
Investors could "get paid by just owning land and spreading this stuff [biochar] all over your field, because this stuff pulls the toxins out of the atmosphere," McKelvy said.
But both projects were far from what company officials described, investigators said.
The Tennessee real estate development consisted of little more than some roads, one model home, and a gate. The land they pitched as "Tennessee's largest master plan community" lacked access to potable water and may have contained unexploded artillery shells, prosecutors said.
According to the indictment, the biochar plant never generated sales.
"Even while claiming their company made millions, they knew that Mantria had virtually no earnings, no profits and was merely using new investor money to repay earlier investors," Assistant U.S. Attorney Robert J. Livermore wrote in the charging documents.
Wragg made an initial appearance later Thursday in a federal court in Georgia, where he was arrested. Prosecutors said Knorr will turn herself in at a date to be determined. McKelvy is in custody.