The Biggest Green Scam in America

Denver’s Wayde McKelvy raised tens of millions of dollars for a new, clean-energy company that the SEC says was nothing more than an old-school Ponzi scheme.

July 2011

A stroll through The Venetian hotel and casino in Las Vegas is a walk of luxury. Marble pillars and gold-plated fixtures frame every hallway, painted murals adorn arched ceilings. Every turn seems to lead to the casino where you’re enticed to ooh and aah at the pretty possibilities; never mind the odds—bet big. It was here, at the Venetian, in December 2008, that Mantria investors gathered for what the partners described as a “big, end-of-year boot camp.”

They packed 100 to 200 strong into the ballroom, where projections of the Mantria logo—a large, oddly shaped M—were on every wall, looming over the audience. According to a handful of investors present for the gathering, McKelvy lurked in the back of the room while Wragg stood on stage in the spotlight. Mantria, he began, had undoubtedly delivered to investors unparalleled opportunities. None, however, were better than what he was about to present: What if you could help solve the climate crisis and eliminate the need for landfills? What would that look like for America? What about the world?

Well, after scouring the country, Wragg had discovered just such an opportunity. Mantria, he announced, was partnering with a company to develop technology that would produce biochar. What’s more, the technology would transform waste into usable products. It was a concept tailored for marketers. As Wragg repeated throughout his talk: “Trash into cash.” Romero, the computer programmer McKelvy had hired, noticed McKelvy standing at the back of Wragg’s presentation. To no one in particular, McKelvy repeatedly interjected his own version of the slogan he originally coined. “Shit into cash,” he kept saying. “Shit into cash.” Romero could tell that McKelvy was drunk.

After the presentation, audience members lined up to give video testimonials. “It’s been a mind-blowing experience,” one said. Another exclaimed, “I’m, like, having to take sleeping pills because I can’t sleep at night! Because I am so excited about what they’re talking about in our investment opportunities!”

Romero saw that McKelvy wasn’t as enthused. At dinner that first day, McKelvy appeared with a beer in hand, continuing to drink. Having seen his theatrics at Wragg’s speech, and now drinking into the late afternoon—Romero saw this as a possible sign of trouble. Romero was still in high school when a contact of his stepfather’s introduced him to McKelvy. It was the early 2000s, and McKelvy asked the kid to build a website for his wife’s insurance business. Romero jumped at the chance. Up to about 2003, he was paid well to develop the site. But then Romero watched McKelvy implode—drinking heavily and eventually filing for bankruptcy. Romero remembers McKelvy one day coming to him and saying, “Hey, we’re out of money.” Romero left for San Diego, where he remained until McKelvy wooed him back in 2008. Now, in Vegas, there was something in McKelvy’s demeanor; something of that old Wayde that Romero saw in the new Mantria Wayde.

Romero and other employees rode the strip of bright lights in stretch limos. At a VIP club, they were escorted past long lines into roped-off areas where, as Romero puts it, “top-shelf liquor is flowing like the nearby waterfall. It. Was. Crazy.” To employees like Romero, the party seemed a deserved celebration of the past year’s work and the future’s infinite possibilities. “We were going to save the planet,” Romero says, “and we were having a blast doing it.”

McKelvy didn’t attend the party on the strip. By the last day of the three-day boot camp, he was gone. He didn’t even show for his planned presentations. Outwardly, he had plenty of reasons to party and stick around. He had millions of reasons. He was becoming rich off of the commissions. He was well on his way to making $6 million over two-and-a-half years.

Business at Mantria boomed in the new year, 2009. The company was supposedly working on deals with New York and Colorado; the governments of Congo, West Africa, Liberia, Nigeria, and Ivory Coast; and with corporations like Cowboy Charcoal and John Deere. After standing on stage with Bill and Hillary Clinton in New York that year, Wragg employed what may have been stunningly transparent phrasing when he told investors, “It only adds another aura of credibility to what we’re doing.” McKelvy had already raised another $27 million.

Experts say Mantria’s technology could have achieved something similar to what was reported. But only with years of further tweaking. Hugh McLaughlin, the director of biocarbon research for Alterna BioCarbon in British Columbia, recalls witnessing Wragg tell a renewable energy conference that Mantria’s technology could generate biochar at a rate that would exceed scientific limits. Mantria’s promise, simply put, ridiculously outpaced reality. “Every fact about this thing,” McLaughlin says, “was exaggerated beyond any reasonable technical standards.” Yet only a few weeks after Vegas, during a January webinar with investors, McKelvy and Wragg projected a 53 percent annual return on a buy-in to the carbon-diversion systems.

Whatever melancholy—or was it pangs of conscience?—McKelvy might have been feeling in Vegas, was gone. Never mind the odds—bet big, was essentially what he told his investors: “I want you to go to your [401(k)] administrator tomorrow and ask them what it would take for you to roll out all your money. Don’t worry about anything they tell you. They’re going to try to frighten you. Don’t worry about that because [in] the mega-Webinar on February 10 I’m going to blow your mind.”