With little more than a Temple University degree and access to a few acres of Eastern Tennessee highlands, Troy Wragg built a revolutionary real estate and energy firm that attracted more than $54 million in financial backing.
At least that’s what he told his investors.
In truth, the 35-year-old admitted Thursday, even as his Bala Cynwyd-based Mantria Corp. was promising to make its backers “stinkin’, filthy rich,” the company was bleeding millions of dollars a quarter.
Its groundbreaking green-energy technology was simply a pipe dream, he told U.S. District Judge Joel H. Slomsky. And his patch of Tennessee land -- which the company once billed as the state’s “largest master planned community” -- remained nothing more than a strip-mined wasteland, home to a World War II-era test firing range.
Wragg “portrayed Mantria as the next Microsoft – a company which would change the world and make every investor fabulously wealthy,” Assistant U.S. Attorney Robert J. Livermore wrote in court filings. He was “able to raise such fantastic sums because [he] presented a fantasy world to prospective investors.”
With his guilty plea Thursday to charges including conspiracy and securities fraud, Wragg, who graduated from Temple in 2005 with a degree in business administration, became the second defendant to admit his role in the financial fiasco surrounding Mantria’s 2009 collapse.
His college girlfriend and Mantria co-founder, Amanda Knorr, 33, pleaded guilty last year. Their co-defendant, Wayde McKelvy, a 54-year-old unlicensed securities salesman from Colorado and Mantria’s pitchman to investors, is scheduled to stand trial in September.
Their 2015 indictment came six years after the Securities and Exchange Commission filed suit against the company in Colorado, shut down the firm, and obtained a court order barring its principals from raising new funds. Various people linked to the company and its associated entities have agreed to a $6 million settlement with investors.
Wragg said little in court Thursday, answering routine questions from Slomsky as he entered his plea. He is likely to face a prison term of up to about 20 years under federal sentencing guidelines.
His lawyer, Joseph D. Mancano, did not immediately return requests for comment after the proceedings.
According to court filings, Wragg saw McKelvy as a lifeline for Mantria as it struggled under the weight of the 2008 collapse of the real estate market.
Prosecutors have painted the Colorado man as a shameless huckster who lured investors to Mantria in flashy seminars he called “Speed of Wealth” clubs and promising yields as high as 484 percent.
He hired celebrities, including NFL Hall of Fame player John Elway, to draw crowds while selling them on the company’s projects, such as its purported 4,500-home development in Tennessee and a $3.2 million plant in Dunlop, Tenn., devoted to the production of “biochar,” a green-energy charcoal substitute made from environmental waste.
Investors could “get paid just by owning land and spreading this stuff [biochar] all over your field, because this stuff pulls the toxins out of the atmosphere,” McKelvy is quoted in court filings as telling potential investors in a May 2009 seminar.
But both projects were far from what company officials described, Wragg admitted Thursday. The biochar plant never generated significant sales.
The real estate development consisted of little more than some roads, one model home, and a gate. The land lacked access to potable water and may have contained unexploded artillery shells.
“Like many who end up running Ponzi schemes, Wragg didn’t set out to defraud investors,” Livermore wrote in court filings. “When Mantria began to experience financial problems early on, little lies to keep Mantria afloat begot bigger lies which begot even bigger lies until Mantria was nothing but a hollow shell of what was promised to investors.”
Wragg is expected to be sentenced after McKelvy's trial.