A long-awaited settlement appears near in what was once dubbed "the biggest green scam in America" and described by federal regulators as a $54.5 million Ponzi scheme perpetrated through a Bala Cynwyd-based company started by two Temple University grads.
The $6 million class-action agreement with a group of defendants once linked to the now defunct Mantria Industries is expected to be filed today by lawyers representing as many as 500 investors who lost millions in a case that began in 2009. The Securities Exchange Commission shut down the company in November of that year and found that the company — after returning $17 million to early investors — had just $790,000 of the other $37 million left in assets.
Attorney Patrick Howard called the $6 million settlement, which still has to get final approval from a federal judge in Colorado, a "hard-fought" victory for Mantria investors. Like the sordid and often befuddling saga of Mantria, the settlement isn't easy to explain.
None of the central characters behind Mantria's rise — its founders, Temple alums Troy Wragg and Amanda Knorr, and the notorious Denver-based investment seminar pitchman, Wayde McKelvey — is part of the settlement agreement.
Instead, the defendants include Christopher Flannery, a lawyer from a prestigious Philadelphia law firm and Daniel Rink, an accountant from a city accounting firm; both advised Mantria and then became company employees. Their initial companies, including Center City law firm Astor, Weiss, Kaplan & Mandel, are also defendants.
"In November 2009, the SEC busted the door open on Mantria," said Howard, of Philadelphia law firm Saltz, Mongeluzzi, Barrett & Bendesky. "Now, five years later, the victims are getting some closure."
Wragg, Knorr and McKelvey were all barred from inclusion in the class action suit because of a $135 million judgment won by the federal government in 2012.
Wragg and Knorr, now in their early 30s, could not be reached for comment. Wragg, who at the time of the SEC shutdown in 2009 was driving a Mercedes SLK350 with a "MANTRIA" vanity license plate, now lives in Bethlehem, Pa., according to property records. He is currently promoting a new venture, YourVibe.com, which aims to connect new musicians to fans through the web.
A message left for a woman who reportedly works for YourVibe was not returned.
Knorr is working somewhere in the Lehigh Valley as a waitress, according to online reports on a website that has tracked the happenings of Mantria since its alleged fraud went public.
At its height, Mantria's alleged scheme touched former President Bill Clinton and NFL hall-of-famer John Elway. Two months before the SEC shut the company down, Wragg was onstage with Clinton being honored by Clinton's charitable foundation for the fight to "mitigate global warming."
Elway was paid thousands of dollars in speaking fees for appearing at investment seminars organized by McKelvey, who fed millions to Mantria through his company, Speed of Wealth.
Wragg and McKelvey pitched Mantria as a company on the forefront of alternative energy development. Investors were told of Mantria's development of a "biochar" facility in rural Tennessee. The facility did exist, according to an investigation by Metro Philadelphia newspaper. But the facility did not produce biochar. The Metro report also questioned biochar as a viable clean energy source.
Under Wragg's leadership, Mantria also delved into music and real estate. But those were just two of the company's 30 divisions before it was shut down.
The hundreds of Mantria investors, many who are from the Philadelphia and Pittsburgh areas as well as across the country, will be able to seek a portion of the settlement once federal Judge Christine Arguello gives final approval. A hearing on that final approval is scheduled for July 17 in Denver.
Criminal charges have not been filed, though reports previously indicated that a federal grand jury in Colorado had investigated the case. An agent at the FBI's Field Office in Denver said no one would comment on the case and messages left for the U.S. Attorney for Colorado were not returned Thursday.