$54M Madoff-like Ponzi 'Green Scheme' has Victims Fighting for Lost Investments

May 21, 2012, 2:15PM. By Abi Kistler

Philadelphia, PA (press release)$54 million pales in comparison to the billions swindled by Bernard Madoff’s Ponzi scheme, but there is no difference to the hundreds of victims--many of them elderly--of the alleged financial fraud led in part by once high-flying Mantria Corp., a former Bala Cynwyd company, according to a Complaint filed by Philadelphia-based Saltz Mongeluzzi Barrett & Bendesky (“SMBB”).

Mantria, which late last year was found liable for securities fraud in an action brought by the U.S. Securities & Exchange Commission (SEC), conspired with Colorado-based Speed of Wealth LLC in the infamous “green scheme” in which unsuspecting investors were lured with promises of bloated returns on investments in environmental technologies, including what was billed as the world’s first biochar alternative fuel source production facility.

Patrick Howard, an attorney at SMBB, who is leading the suit on behalf of defrauded investors, said the Complaint filed in Colorado District Court (11-cv-08971-WYD) seeks class action status and contends that Mantria received substantial assistance in executing its fraud, by, among others, the Philadelphia law firm of Astor, Weiss, Kaplan, and Mandel. Astor Weiss, it is alleged, served Mantria as “special securities counsel” who prepared many of the allegedly misleading Mantria offerings as well as serving as its escrow agent in effecting the sale of its fraudulent securities offerings.

“The SEC demonstrated in its action that this was a sophisticated fraud,” explained Howard, “and the Complaint for recovery and damages on behalf of the victims asserts that these individuals, including the Astor Weiss firm, helped to perpetuate the fraud through its actions and failed in its professional responsibility to bring the inappropriate conduct to light.” He added, “Unfortunately, it has become all too common that those who should be providing oversight and guidance turn a blind eye to fraudulent conduct to line their own pockets.”

By the time the SEC shuttered the scheme in November 2009, Mantria had raised more than $54 million from unsuspecting investors through illegal securities offerings and slick marketing efforts, including elaborate “get-rich” seminars. Contrary to the estimates of investor returns exceeding 400 percent based on forecasted profits, Mantria could only pay these returns using the funds from later investors in what has been called a classic Ponzi scheme that followed the earlier Madoff model.

“We have repeatedly heard from Mantria investors who were financially ruined and spiritually broken as a result of this wide ranging fraud,” said Howard, a member of SMBB’s class action practice group. He is encouraging anyone, including residents of the greater Philadelphia area that invested with Mantria or through Speed of Wealth, to inquire at no cost about their eligibility to join the pending litigation.