Founder of Mantria Corp. Sentenced to 22 Years For Operating $54 Million Ponzi Scheme

[TexasTowelie]

WASHINGTON – A former Kansas bank executive was found guilty by a federal jury yesterday for his participation in a bank fraud scheme to obtain a $15 million construction loan for certain bank customers based upon false and fraudulent representations. The loan was shared among 26 Kansas banks.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Justin R. Bundy of the Federal Deposit Insurance Corporation Office of Inspector General’s (FDIC-OIG) Kansas City Regional Office, Special Agent in Charge Timothy R. Langan of the FBI’s Kansas City Field Office and Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency Office of Inspector General’s (FHFA-OIG) Central Region Office made the announcement.

Troy A. Gregory, 52, of Lawrence, Kansas, was found guilty of four counts of bank fraud and two counts of false statements, as charged in a November 2017 indictment. The jury failed to reach a verdict as to one count of conspiracy. Sentencing is scheduled for Jan. 28, 2020, before U.S. District Judge Carlos Murguia of the District of Kansas, who presided over the trial.

According to the evidence submitted at trial, Gregory was a bank executive and loan officer who had made millions of dollars in loans to a group of borrowers who were struggling to make payments on the loans. Beginning in approximately late 2007, Gregory began the process of making a $15.2 million construction loan to build an apartment complex to that same group of borrowers. Gregory’s bank shared this loan with 25 other Kansas banks. Gregory made and caused others to make false statements to the banks about the strength of the borrowers, the debt status of the apartment property and the existence of approximately $1.7 million in certificates of deposit for collateral on the loan, all to get the loan approved. Instead of using the loan funds promised for building the apartments, Gregory immediately diverted over $1 million of the loan to pay for part of the certificates of deposit pledged as collateral, pay off debt on the apartment property, and make payments on unrelated loans, the evidence showed. Other Kansas banks that shared in this loan would not have participated in the loan without the false representations and promises. The banks ultimately wrote off millions of dollars on the $15.2 million construction loan, the evidence showed.

Read more: https://www.justice.gov/usao-edpa/pr/founder-mantria-corp-sentenced-22-years-operating-54-million-ponzi-scheme

[nitpicker]

1. I think you meant to post this

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Tuesday, August 20, 2019

Founder of Mantria Corp. Sentenced to 22 Years For Operating $54 Million Ponzi Scheme

PHILADELPHIA – United States Attorney William M. McSwain announced that Troy Wragg, 37, of Philadelphia, PA was sentenced today to 22 years in prison and $54 million restitution by United States District Judge Joel H. Slomsky for perpetrating two fraud schemes.

The defendant was the founder of Mantria Corporation, based in Bala Cynwyd, PA. From 2005 until 2009, Wragg received approximately $54 million in funds from investors across the United States with the false promise that they would earn 50% or higher returns on their investments. The defendant told the victim investors that Mantria was a very successful company with investments in real estate and green energy. In reality, however, Mantria was a Ponzi scheme which used new investor funds to pay “earnings” to earlier investors.

Wragg obtained these large investments through co-defendant Wayde McKelvy, who ran unlicensed investment clubs in Colorado. In addition to advising the victims to invest their retirement savings in Mantria, Wragg and McKelvy coached the victims to obtain home equity loans, credit card loans, and other loans to raise even more funds to invest in Mantria. Thus, when the Mantria Ponzi scheme collapsed, many of the victims were left financially devastated.

While on bail pending sentencing for the Mantria fraud, Wragg brazenly committed a second fraud scheme. The defendant solicited an investment in an online video dating service, known as LUVR, with the false representation that the company was about to be purchased by a well-known internet entrepreneur. In reality, no such deal ever existed and the victim lost her entire investment.
(snip)

[TexasTowelie]

2. Thanks.

I should have been paying closer attention.