Thursday, December 03, 2009

How not to invest. Let me count the ways... 

Put all your eggs in one basket...

Do it because "a friend" told you to...

Borrow to put yet more eggs in the basket (on your credit card! to the max!)...

Believe you'll make a fortune from a hot and trendy new product that's full of promise, but doesn't quite exist yet...

Trust the investment manager to whom you give your overflowing basket of eggs, without checking who he is or where he came from...

Believe celebrity endorsements, especially from famous pro athletes -- and even President Bill Clinton himself! -- because they know so much about investing and have your interest at heart...
Announcing the Partnership of the Century!

Speed of Wealth and Mantria

Speed of Wealth and Mantria have joined forces to save the environment while helping middle America secure its financial future!

Mantria Honored by President Bill Clinton and Secretary of State Hillary Clinton [video]


And then take the consequences...

Fully invested ... and worried, too

At a friend’s recommendation, Dee Holl considered investing her $150,000 retirement savings in Mantria Corp. late last year.

After researching the company and its various plans for supposed “carbon-negative” communities and green technology, the unemployed human resources manager from outside Denver liked what she saw. The live seminar she went to only confirmed her optimism.

“We were very much into believing in carbon diversion and biochar and how it was going to help,” said Holl, 60, adding that she took out another $50,000 in credit card debt to invest further in Mantria last January.

How the heck is an unemployed 60-year old human resources manager able to run up a $50,000 cash advance on her credit card?
Hopes for her money have turned 180 degrees, however, since allegations of a $30 million Ponzi-like scheme were filed by the Securities and Exchange Commission Nov. 16.... [Metro]
Concerning which ...

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....

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 lawsuit names two companies, the Mantria Corporation in Bala-Cynwyd, Pa., run by Troy Wragg and Amanda Knorr; and Speed of Wealth L.L.C. in Centennial, Colo., a “wealth education” program founded by Wayde McKelvy and his ex-wife Donna.

According to [the SEC] 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...
Well, it's certainly succeeding at giving some people an education!

... 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.
And they had famous friends helping them.

Denver Broncos legend and Hall of Fame quarterback John Elway was paid to speak at two Speed of Wealth meetings, and possibly more. And a connected company, Mantria, was honored by former President Bill Clinton at a meeting of his foundation.

A spokesperson for John Elway says his appearances were paid speaking engagements, and he was not endorsing the products.

A spokesperson for Bill Clinton says his foundation did their due diligence on Mantria and found nothing of concern. [KDVR]

Wragg worked as a manager at a small janitorial-services company, and then as a financial adviser to a relative, before starting Mantria...

Troy Wragg points out that the SEC doesn’t allege that any of those named in the civil complaint lived lavishly off of investors’ money, ala Bernie Madoff. ... “I don’t drive a Lamborghini.” ...

Wragg drives a Mercedes SLK350 ... which lists for about $43,000.
Mantria has 30 divisions under its umbrella, from real estate to banking and even a record label.

Mantria Records is working with ICEBLOC which describes itself as “the hottest hip-hop tag team to explode onto the music scene in recent years.” The group was on BET’s Live 106th and Park tour.
“We countin’ paper galore then toss it all on the floor
Count it then I spin it then I toss it in the air
Exchange a couple thousand then I throw it over there”
... the group raps on “Count it.”

Mantria CEO Troy Wragg and COO Amanda Knorr make cameos in the video. “We said these guys are amazing,” Wragg said of meeting the group in Atlantic City. “We tried to do whatever we can to help. [Metro]

The SEC alleges that ... Mantria's divisions, including mortgage banking and hip-hop record production, did not generate significant profits. []

Even in today's world that's seen the public exposure of Bernie Madoff and so many other Ponzi scammers, some investors never learn.

Although one wonders why Ponziers who take advantage of them never seem to anticipate getting caught.

Well, at least these people had fun blowing through everybody else's money. They'll be able to share pleasant memories with Bernie in the Big House.