An article on Mantria was recently published in Leagle. It appears that another creditor was desparately trying to receive payment from Mantria. (see article below)
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MANTRIA CORPORATION, TROY B. WRAGG, AMANDA E. KNORR, SPEED OF WEALTH, LLC, WAYDE M. McKELVY, and DONNA M. McKELVY, Defendants.
WILLIAM R. LOVE, INC., Interested Party.
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, D. Colorado.
June 24, 2010.
ORDER DENYING PETITION FOR RELEASE OF FROZEN ASSETS
CHRISTINE M. ARGUELLO, District Judge.
This matter is before the Court on a Petition for Release of Frozen Assets filed by Interested Party William R. Love, Inc. (Doc. # 89). For the following reasons, the Petition is denied.
This matter arises out of allegations by Plaintiff Securities and Exchange Commission ("SEC"), that Defendants Mantria Corporation, Troy B. Wragg, Amanda E. Knorr, Speed of Wealth, LLC, Wayde M. McKelvy, and Donna M. McKelvy have engaged in a Ponzi scheme to defraud numerous investors of their assets. (See Doc. # 1.)
On November 16, 2009, the SEC filed a Motion for Ex Parte Temporary Restraining Order, Preliminary Injunction and Other Equitable Relief. (Doc. # 2.) That same day, the Court granted the SEC's Motion for emergency relief and entered a temporary restraining order, which froze all funds and assets that were traceable to investor funds. (Doc. # 15.) On December 2, 2009, upon the conclusion of a preliminary injunction hearing, the Court continued the asset freeze (the "Preliminary Injunction Order"). (Doc. # 26.)
On March 10, 2010, the SEC filed a Motion for Appointment of a Receiver, upon receipt of information that Defendants Wragg and Mantria transferred property in violation of the Court's Preliminary Injunction Order. (Doc. # 69.) The Court granted the Motion and, on April 30, 2010, issued an Order Appointing Receiver, namely John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services, LLC. (Doc. # 82, ¶ 2.) As set forth in the April 30 Order, the Receiver's responsibilities include the identification, location, and protection of the receivership estate's assets.
On May 28, 2010, Interested Party W.R. Love, Inc. filed the instant Petition for Release of Frozen Assets. (Doc. # 89.) As set forth in the Petition, W.R. Love, Inc. and its subsidiary Sustainable Golf Development ("SGD") are in the business of golf course planning and design. On August 7, 2008, SGD entered into an agreement with Defendant Mantria for the provision of golf course design services and land planning for the planned residential community, Mantria Place (the "Service Agreement"). As a result of this agreement, W.R. Love, Inc. commenced work on the project and generated costs and fees in the amount of $48,958.51, in which amount W.R. Love, Inc. submitted an invoice to Defendant Mantria. (Doc. # 89-2.) The invoice remains unpaid. Accordingly, W.R. Love, Inc. has filed the instant Petition, requesting a release of Mantria's frozen assets in the amount of $48,958.51.
On June 16, 2010, the SEC responded to the Petition. (Doc. # 92.) In pertinent part, the SEC opposes the Petition because the release of the requested funds would interfere with the Receiver's attempt to identify, locate, and protect the receivership assets for the benefit of more than 300 investors nationwide. Accordingly, the SEC contends that "no funds should be released for the benefit of any specific investor or creditor unless sufficient justification exists." (Id. at 3.) The Court agrees.
At the outset, the Court notes that W.R. Love, Inc., a corporation, filed the instant Petition pro se.[ 1 ] Such a pro se filing by a corporate entity violates D.C.COLO.LCivR 11.1, which expressly precludes, and allows the striking of, pro se filings by corporations.[ 2 ] In any event, the Court finds other reasons to deny the instant Petition, as set forth below.
"Given its equitable nature and purposes, a district court supervising such a receivership has the discretionary power to deny [] equitable remedies as inimical to receivership purposes even though they might be warranted under controlling law." Bermant v. Broadbent, Esq., No. 2:05-cv-466, 2006 WL 3692661, at *6 (D. Utah Dec. 12, 2006) (unpublished) (quoting United States v. Vanguard Inv. Co., 6 F.3d 222, 226-27 (4th Cir. 1993)); see also SEC v. Elliott, 953 F.2d 1560, 1569-70 (11th Cir. 1992) ("A district court had broad powers and wide discretion to determine the appropriate relief in an equity receivership."). Further, "the rights of creditors of a receivership must be balanced against the need for expeditious administration of the receivership; a district court in overseeing a receivership must make rules which are practicable as well as equitable." SEC v. Hardy, 803 F.2d 1034, 1038-39 (9th Cir. 1986) (internal citation and quotation omitted).
Having reviewed the instant Petition, and mindful of the need to balance the rights of creditors, such as W.R. Love, Inc., with the expeditious administration of the receivership assets, the Court denies the instant Petition. That W.R. Love, Inc. is dependent on income to pay salaries and bills does not render it unique from other creditors. To allow creditors to collect on unpaid invoices at this juncture would seriously interfere with the Receiver's efforts to identify, locate, and secure the receivership assets. W.R. Love, Inc. has not provided sufficient justification for its request to be treated differently from Defendants' other creditors.
Accordingly, for the foregoing reasons, IT IS ORDERED THAT:
(1) Interested Party W.R. Love, Inc.'s Petition for Release of Frozen Assets (Doc. # 89) is DENIED; and
(2) W.R. Love, Inc. shall not file any further documents with this Court without representation of counsel.
1. Because the Service Agreement was entered into between Defendant Mantria and SGD, the subsidiary of W.R. Love, Inc., the Court questions whether the instant Petition should have also been filed on behalf of SGD. (See Doc. # 89-1.) However, the Court does not base its denial of the instant Petition on this potential deficiency.
2. "Only pro se individual parties and members of this court's bar may appear or sign pleadings, motions, or other papers. Any pleading, motion, or paper listing in a signature block, or purporting to enter an appearance by, any other person, partnership, professional corporation, limited liability company, or other entity may be stricken." D.C.COLO.LCivR 11.1 (emphasis added). While the instant Petition was signed by an individual, William R. Love, he did so as President of W.R. Love, Inc. Accordingly, the instant Petition is not a pro se filing by an individual, but an improper pro se filing by a corporation.
This copy provided by Leagle, Inc.
x
Saturday, June 26, 2010
Friday, June 11, 2010
Mantria Update #18
BioMass Magazine published an article on Mantria in their June 2010 issue. The following is page 1 of 3:
From the June 2010 Issue ShareThis RSS Feed Print this
Unearthing Green Scams
Some renewable energy investment opportunities seem too good to be true—and occasionally they are. How can a potential investor tell a wise investment from a shell game?
By Anna Austin
Historically, the number of investment fraud cases in a given industry increases with the level of hype surrounding it. If it’s frequently in the news and on the Internet, chances are it’s also plagued by gimmicks, scams and/or embellished technological advancements camouflaged by enticing promises of high and quick returns.
Rapidly expanding and increasingly profitable, the renewable energy industry is seeing its share of fraudulent business conduct. Perhaps the most notorious case within the biomass sector was brought to light in November by the U.S. Securities and Exchange Commission, which charged Pennsylvania-based Mantria Corp. with more than 300 cases of investor fraud via a $30 million Ponzi scheme. Mantria allegedly targeted elderly investors or those approaching retirement age to finance a supposed carbon negative housing community in rural Tennessee, as well as biochar, while claiming to be the world’s leading manufacturer and distributor of biochar with multiple facilities producing at a rate of 25 tons per day.
According to the SEC, Mantria never sold any biochar and had just one facility engaged in testing biochar for possible future commercial production. Mantria’s only source of revenue was from its resale of vacant lots for its purported residential communities in Tennessee, but those sales didn’t generate enough cash to pay investor returns, rather, the company provided 100 percent financing for almost all of its vacant lot sales to buyers using other investors’ funds, the SEC says.
Article Continues After Advertisement
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Interest in biochar as a means to sequester carbon and as a substitute for charcoal has reached new heights in the past few years, a likely reason why scammers are hot on its trail, according to John Gannon of the Financial Industry Regulatory Authority. “When an area is hot for investors, scamsters understand that and so that’s where they target their scams,” he says. “When oil prices are high, we see oil and gas scams. When Hurricane Katrina hit, we saw scams there as well. Whatever is in the news is what scamsters and fraudsters target. The legitimate stories in the media help them build credibility about the purported investment that they are pitching.”
Swindling Styles
FINRA is a private corporation that oversees nearly 4,750 brokerage firms, about 167,000 branch offices and approximately 634,000 registered securities representatives. Formed by a consolidation of the enforcement arm of the New York Stock Exchange, NYSE Regulation Inc. and the National Association of Securities Dealers Inc., one of FINRA’s many functions is to issue alerts and advice to investors to help protect their money and avoid scams.
Gannon, who is FINRA’s senior vice president of investor education, says there are two main ways of being scammed. The first, which is the scam that Mantria allegedly employed, is a Ponzi scheme. Named after Charles Ponzi who became notorious for using the technique during the early 1920s, the operation pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Mantria scammers allegedly encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds and mutual funds and urged them to borrow as much as possible against their homes or businesses so that they could invest in Mantria. The funds acquired from new or existing investors were then used to pay other investors.
The other most common scam is a “pump-and-dump” scheme. “The idea is to increase the price of the stock quickly by putting out bogus press releases, touting it on the Internet and in other various solicitations, basically creating a lot of activity to quickly jack up the price of the stock, and then they sell the shares they own and gain a big profit,” Gannon says. “The prices then quickly go down when there’s no more news/hype, and the investors who bought in at that time are left holding the bags.”
In 2008, for example, the SEC filed charges against Mississippi-based Sustainable Energy, alleging that the company made false claims to boost share prices from 25 to 45 cents a share, even above 70 cents after some wildly exaggerated press releases. In one release, Sustainable Energy said it could produce 5 gallons of biofuel from one bushel of soybeans, at a price of 50 cents per gallon. As a result of the alleged embellished claims, stock prices soared quickly—and artificially—prompting Sustainable Energy CEO John H. Rivera’s girlfriend to sell more than 2.6 million shares and then transfer a substantial portion of the proceeds into a bank account held jointly with Rivera.
Whether Ponzi, pump-and-dump or other, before an investor is lured into a bad investment, Gannon says it’s likely that multiple red flags will be present that should be carefully analyzed.
Look for Red Flags
Investors should always raise an eyebrow when the initial investment opportunity discovers the potential investor, rather than vice-versa, Gannon says. “Especially when the individual or organization presenting the opportunity is unknown or fairly unknown to the investor,” he says. “Ask yourself … why would somebody you don’t know bring you a promise of the next-greatest investment out there? Why are they targeting you with this pitch? If it’s so good, why aren’t they investing themselves?”
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From the June 2010 Issue ShareThis RSS Feed Print this
Unearthing Green Scams
Some renewable energy investment opportunities seem too good to be true—and occasionally they are. How can a potential investor tell a wise investment from a shell game?
By Anna Austin
Historically, the number of investment fraud cases in a given industry increases with the level of hype surrounding it. If it’s frequently in the news and on the Internet, chances are it’s also plagued by gimmicks, scams and/or embellished technological advancements camouflaged by enticing promises of high and quick returns.
Rapidly expanding and increasingly profitable, the renewable energy industry is seeing its share of fraudulent business conduct. Perhaps the most notorious case within the biomass sector was brought to light in November by the U.S. Securities and Exchange Commission, which charged Pennsylvania-based Mantria Corp. with more than 300 cases of investor fraud via a $30 million Ponzi scheme. Mantria allegedly targeted elderly investors or those approaching retirement age to finance a supposed carbon negative housing community in rural Tennessee, as well as biochar, while claiming to be the world’s leading manufacturer and distributor of biochar with multiple facilities producing at a rate of 25 tons per day.
According to the SEC, Mantria never sold any biochar and had just one facility engaged in testing biochar for possible future commercial production. Mantria’s only source of revenue was from its resale of vacant lots for its purported residential communities in Tennessee, but those sales didn’t generate enough cash to pay investor returns, rather, the company provided 100 percent financing for almost all of its vacant lot sales to buyers using other investors’ funds, the SEC says.
Article Continues After Advertisement
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest in biochar as a means to sequester carbon and as a substitute for charcoal has reached new heights in the past few years, a likely reason why scammers are hot on its trail, according to John Gannon of the Financial Industry Regulatory Authority. “When an area is hot for investors, scamsters understand that and so that’s where they target their scams,” he says. “When oil prices are high, we see oil and gas scams. When Hurricane Katrina hit, we saw scams there as well. Whatever is in the news is what scamsters and fraudsters target. The legitimate stories in the media help them build credibility about the purported investment that they are pitching.”
Swindling Styles
FINRA is a private corporation that oversees nearly 4,750 brokerage firms, about 167,000 branch offices and approximately 634,000 registered securities representatives. Formed by a consolidation of the enforcement arm of the New York Stock Exchange, NYSE Regulation Inc. and the National Association of Securities Dealers Inc., one of FINRA’s many functions is to issue alerts and advice to investors to help protect their money and avoid scams.
Gannon, who is FINRA’s senior vice president of investor education, says there are two main ways of being scammed. The first, which is the scam that Mantria allegedly employed, is a Ponzi scheme. Named after Charles Ponzi who became notorious for using the technique during the early 1920s, the operation pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Mantria scammers allegedly encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds and mutual funds and urged them to borrow as much as possible against their homes or businesses so that they could invest in Mantria. The funds acquired from new or existing investors were then used to pay other investors.
The other most common scam is a “pump-and-dump” scheme. “The idea is to increase the price of the stock quickly by putting out bogus press releases, touting it on the Internet and in other various solicitations, basically creating a lot of activity to quickly jack up the price of the stock, and then they sell the shares they own and gain a big profit,” Gannon says. “The prices then quickly go down when there’s no more news/hype, and the investors who bought in at that time are left holding the bags.”
In 2008, for example, the SEC filed charges against Mississippi-based Sustainable Energy, alleging that the company made false claims to boost share prices from 25 to 45 cents a share, even above 70 cents after some wildly exaggerated press releases. In one release, Sustainable Energy said it could produce 5 gallons of biofuel from one bushel of soybeans, at a price of 50 cents per gallon. As a result of the alleged embellished claims, stock prices soared quickly—and artificially—prompting Sustainable Energy CEO John H. Rivera’s girlfriend to sell more than 2.6 million shares and then transfer a substantial portion of the proceeds into a bank account held jointly with Rivera.
Whether Ponzi, pump-and-dump or other, before an investor is lured into a bad investment, Gannon says it’s likely that multiple red flags will be present that should be carefully analyzed.
Look for Red Flags
Investors should always raise an eyebrow when the initial investment opportunity discovers the potential investor, rather than vice-versa, Gannon says. “Especially when the individual or organization presenting the opportunity is unknown or fairly unknown to the investor,” he says. “Ask yourself … why would somebody you don’t know bring you a promise of the next-greatest investment out there? Why are they targeting you with this pitch? If it’s so good, why aren’t they investing themselves?”
1 2 3 Next Page -->
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