Background:
- September 2, 2015 Unsealed Federal Indictment, U.S. District Court, Eastern Pennsylvania, Case No. 15-cr-398-JHS, UNITED STATES OF AMERICA v. TROY WRAGG, AMANDA KNORR, and WAYDE MCKELVEY re: the expansive MANTRIA CORP. / ETERNAGREEN GLOBAL CORP. / SPEED OF WEALTH ‘BioChar’ Pyrolysis Ponzi Scheme
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- The Morning Call: Hellertown, Pennsylvania Woman Admits Guilt in $54 Million Ponzi Scam, by Peter Hall
When Amanda Knorr graduated from Temple University in 2006, the Hellertown woman put her biological anthropology degree to use as the “science expert” for her college boyfriend’s green energy company, which promised to turn “trash to cash” for investors.
Knorr joined Troy Wragg of Philadelphia, whom she met at Temple, to explain the science behind their bioenergy firm to backers, while promising returns of up to 484 percent and assuring them that real estate worth twice as much as their investments secured the venture.
Between 2005 and 2009, Wragg and Knorr’s company, Mantria Corp., raked in more than $54 million with the help of a pitchman from Colorado, Wayde McKelvy, who ran get-rich-quick seminars promising to make the investors “filthy, stinking rich.”
In reality, federal prosecutors allege, Mantria in Bala Cynwyd, Montgomery County, was a Ponzi scheme based on a plan to sell building lots in a polluted Tennessee wasteland possibly littered with unexploded World War II artillery shells.
The biofuel technology Wragg claimed would make Mantria “the next Microsoft” was unproven and ill-suited for the projects he falsely told investors were already up and running, prosecutors say.
“Although the economic and scientific reality of the situation was grim, Wragg, Knorr and McKelvy were able to raise such fantastic sums because they presented a fantasy world to prospective investors,” Assistant U.S. Attorney Robert Livermore said in a court filing.
Knorr, 33, admitted her role in the scheme Tuesday, pleading guilty before U.S. District Judge Joel H. Slomsky to two conspiracy charges, seven counts of wire fraud and one count of securities fraud.
The charges carry a maximum prison sentence of 240 years, according to a guilty plea memorandum filed in federal court in Philadelphia. Knorr could also be fined $12.5 million and ordered to make full restitution and forfeit any property linked to her crimes.
The judge set Knorr’s sentencing for Nov. 3, court records show.
An attorney for Knorr, Glennis L. Clark of Allentown, did not respond to a phone call or email Wednesday.
Wragg, 34, and McKelvy, 53, face trial on the same charges. Wragg’s lawyer, Joseph Mancano of Philadelphia, said his client maintains his innocence. McKelvy’s lawyer did not return a call.
Federal prosecutors allege Knorr, Wragg and McKelvy misled more than 300 investors across the country, lying about Mantria’s financial health to gain backing for projects in what a Denver magazine described as “The Biggest Green Scam in America.”
They included planned communities in Tennessee, clean-energy plants nearby that purportedly produced fuel from household waste and a valuable charcoal-like substance used in farming called biochar, and a firm to produce equipment for clean-energy installations elsewhere.
[Side Note: Green Box NA Green Bay LLC Human Resources Director Philip J. Reinhart testified that Ron Van Den Heuvel’s GBNAGB holds patents for creating “biochar,” and on October 5, 2011, Former Green Bay Mayor Paul Jadin, acting as WI Gov. Scott Walker‘s quasi-public Wisconsin Economic Development Corporation (WEDC) CEO, signed Contract #WEDC FY-12-21010 awarding Green Box a $1.1 million loan for its operations in the City of De Pere, WI, to “recycle food-contaminated waste to create tissue products, oil, diesel, ethanol compressed syngas, synthetic fuels, sugars, biochar soil enhancement material, paper cups, and electricity” using “pyrolysis,” which is also referred to as “thermal conversion.” {Also, click this link for an archived page of www.greenboxna.com/about-us discussing Green Box’s claims regarding biochar}.
On March 19, 2012, Ron Van Den Heuvel’s Green Box NA Green Bay, LLC, later received an additional $191,231 from WEDC via Contract #WEDC FY12-21248 for the same pyrolysis project.
Based on Ron Van Den Heuvel’s partnership with Oneida Tribe member Artley Skenandore’s Swakweko, LLC, and with OSGC in the ill-fated Nature’s Way Tissue Corp. debacle, Oneida Eye believes that the “proprietary systems for gasification” which OSGC, OEI, and GBRE sought to construct – and OSGC-subsidiary IEP Development, LLC, said it had “exclusivity to market” to tribes, counties, and municipalities – are presumably the same technology and processes which Ron Van Den Heuvel has claimed are his to bestow to companies, especially given that OSGC’s and Green Box’s energy projects involved participation by Mr. Latif Mahjoob of American Combustion Technologies (of California) Inc. / ACTI.
Ron’s & OSGC’s business associate Abdul Latif Mahjoob has registered a new company in California. American Combustion Technologies, Inc. / ACTI has re-branded itself as American Renewable Technologies, Inc. / ARTI, after ACTI was sued for Fraud. regarding the failure of ACTI’s equipment to function as advertised that was sold to the Nevada subsidiary of a company based in Colorado. More on Colorado below.]
Back to the Law360.com article:
But the land Wragg agreed to sell for his sister’s father-in-law in 2005 was essentially worthless. Timber and strip mining left the groundwater undrinkable and its use as a World War II firing range posed questions about its safety. Years earlier, a boy in a neighboring county lost his hand playing with an unexploded shell, prosecutors noted.
To sell the land, Wragg and Knorr needed to build roads and infrastructure. But they had no money, so the couple sought investors, promising triple-digit returns and guaranteeing the loans with property that the company technically didn’t own. Under its purchase agreements, Mantria had to sell the property, or it would revert to its original owners after two years, prosecutors said.
When the 2006 financial crisis caused real estate values to crash, the land became harder to sell and Mantria struggled to stay afloat. Wragg turned to McKelvy, an insurance salesman by trade, to attract new investors.
McKelvy touted Mantria in his “Speed of Wealth” seminars on television and radio, promising the returns on its property deals would make investors rich. In his talks, McKelvy urged listeners to liquidate their savings and invest in Mantria, prosecutors said.
“Knowing that the two-year real estate contracts were ticking time bombs which would destroy Mantria, Wragg needed a new scheme to generate investor interest and enthusiasm,” prosecutors said in the plea memo.
With energy prices soaring, Wragg devised a plan to make the Tennessee planned communities “carbon neutral” by building facilities to turn the forests that would be cut down to make way for homes and, later, trash from the homes, into profitable biochar. He also proposed a partnership to build a factory in New Mexico to produce biochar equipment, prosecutors said.
Knorr touted the company on McKelvy’s Internet radio show with false statements about the success of Mantria’s biochar plants, her plea memo says. She told potential investors that its process was 20 percent more efficient than competitors’ plants and was producing product for shipment to Africa, Australia and India. In reality, the company had produced very little because the sites and technology were unfeasible, prosecutors said.
“After listening to the sales pitches of Wragg, McKelvy and Knorr, investors threw millions of dollars into these green energy projects believing that Mantria was on the cusp of a revolutionary technology,” the plea memo says.
In 2009, the U.S. Securities and Exchange Commission took action against Mantria in federal court in Colorado, and the Ponzi scheme collapsed. The court appointed a receiver to distribute assets to investors, but of the $54.5 million Mantria took in, only about $600,000 remained. Prosecutors said money brought in from new investors went to earlier ones, an effort to keep the Ponzi scheme going.
The SEC won a $37 million civil judgment against Wragg and Knorr in 2012, and investors who filed a class-action suit won a $6 million settlement in 2014 from those who gave Mantria business and legal advice.
But wait, there’s more!
- Law360.com: Pennsylvania Woman Pleads To $54 Million Green Energy Ponzi Scheme, by Alex Wolf
Amanda Knorr, who was one of three defendents named in a September indictment for allegedly carrying out a Ponzi scheme that tricked investors nationwide into sinking money in the group’s failed green energy business plan, entered a guilty plea during a change of plea hearing Tuesday.
[Knorr] and co-defendant Troy Wragg were the founders of Mantria Inc., while defendant Wayde McKelvy ran seminars and advertisements encouraging potential investors to liquidate their savings and invest in [Mantria].
Wragg, a Pennsylvania resident, and McKelvy, of Colorado, are scheduled to stand trial in September on charges of conspiracy to commit wire fraud, conspiracy to commit securities fraud, securities fraud, and seven counts of wire fraud. …
Wragg’s attorney, Joseph D. Mancano of Cedrone & Mancano LLC, who was granted a request Wednesday to access Knorr’s sealed plea hearing transcripts, told Law360 on Thursday that based on the information he had, Knorr’s plea deal “was not unexpected.”
According to prosecutors, Mantria started out as a real estate businesss, and Wragg, Knorr and McKelvy did spend some of the investment money on land in Tennessee, purportedly creating a “carbon negative” housing community. But after making limited improvements to the land in order to create the appearance of development for investors, they moved toward “green energy,” and began investing in facilities to manufacture “biochar,” a charcoal substitute made from organic waste. …
Recall that Oneida Nation in Wisconsin-owned Oneida Seven Generations Corporation also “started out as a real estate business” and we know in addition to Nature’s Way Tissue Corp. – the failed business partnership of Oneida Nation’s former General Manager Artley Skenandore, Ron Van Den Heuvel, Steven Peters and OSGC which was judged in 2013 to have illegally withheld state payroll taxes – there also exists Nature’s Way Estates LLC, for which the Registered Agent is Patrick Murphy, husband of Ron Van Den Heuvel’s sister Ann Murphy.
The Law360 article then says:
The one facility that was built lacked the logistical infrastructure to ever achieve profitability, and two other promised facilities were never built.
Reminds the Oneida Eye of when the Wisconsin State Journal reported regarding search warrants for Ron Van Den Heuvel:
The Brown County Sheriff’s Office has been investigating Ron Van Den Heuvel and his waste-[incinerator] company Green Box NA Green Bay since January 2015, when a doctor who had invested $600,000 in Green Box filed a fraud complaint. Detectives executed search warrants at Van Den Heuvel’s home and business in early July and seized a truckload of documents.
Brown County Sheriff’s Office Capt. David Konrath said in an interview this week that the FBI, Securities and Exchange Commission and Internal Revenue Service have since joined the investigation and that the lead detective in his office is hoping to wrap up her investigation before retiring in May. …
In October, the Wisconsin State Journal obtained the previously sealed search warrant affidavits, which alleged Van Den Heuvel had defrauded investors, including [the Wisconsin Economic Development Corp.], with a vacant building that “was never for sale but was used as a prop” and claiming he held seven technology patents “when, in fact, he holds none.”
Back to the Law360 article about Knorr, Wragg, McKelvy and the Mantria Pyrolysis Ponzi Scheme:
Still, the company managed to raise more than $54 million, mainly because of the efforts of McKelvy, who operated what he called “Speed of Wealth” clubs. These entities advertised on television, radio and the Internet. They also held seminars for prospective investors, promising to make them rich.
The indictment says McKelvy taught investors to liquidate all their assets such as mutual funds and 401(k) plans, to take out as many loans as possible, such as home mortgages and credit card debt, and invest all those funds in Mantria. During those seminars and other programs, Wragg, Knorr and McKelvy allegedly lied to prospective investors to dupe them into investing in Mantria and promised investment returns as high as 484 percent.
The scheme continued until November 2009 when the U.S. Securities and Exchange Commission initiated civil securities fraud proceedings against Mantria in Colorado. In September 2010, U.S. District Judge Christine M. Arguello found in favor of the SEC, ordering an injunction against the company and calling for more than $17.5 million to investors. The indictment also said Wragg and Knorr paid McKelvy $6.2 million in commission for raising investor funds.
While the SEC investigation provided for the basis of the criminal charges, the scheme also prompted another civil suit against Mantria affiliates who allegdly aided the deception. In July 2014, lead plaintiff Touchstone Group LLC…saw its [offer for a] $6.05 million settlement with a series of defendants approved by Judge Arguello.
Knorr is represented by Glennis L. Clark.
Wragg is represented by Joseph D. Mancano of Cedrone & Mancano LLC.
McKelvy is represented by William J. Murray and Walter S. Batty.
The case is being prosecuted by Assistant U.S. Attorney Robert J. Livermore.
The case is USA v. Wragg et al, case number 2:15-cr-00398, in the U.S. District Court for the Eastern District of Pennsylvania.
For consideration from a similar situation:
- Courthouse News Service: Law Firms Connected to Ponzi Fraud Owe Big Bucks
Heavy-hitting law firms Greenberg Traurig and Quarles & Brady will together pay $77.5 million to settle a class action that accused them of aiding a $900 million Ponzi scheme. …The class said that [the law firms] created “a facade of legitimacy” that allowed the Ponzi scheme to continue
Consider that Illinois-based Atty. Eric Decator’s Generation Clean Fuels (GCF; formerly known as Arland Clean Fuels/ACF) lost lawsuits to Wisconsin investors Tina Fritsch and David J. Wolf for the return of their money after GCF/ACF preposterously projected that individuals who invested $250,000 would have returns of $1.5 million over six (6) years.
That’s a 600% return on investment!
How on E.A.R.T.H. could that be possible?!
Supposedly through Oneida Seven Generations Corp.-subsidiaries Green Bay Renewable Energy LLC’s & Oneida Energy Inc./Oneida Energy Blocker Inc.’s roles in ‘Plastics-to-Oil’ schemes initiated by a Committment Letter signed by five OSGC Board members on May 6, 2013…
THE VERY DAY after GTC – the Supreme Governing Body of the Oneida Nation in Wisconsin – voted to prohibit ‘Plastics-to-Oil’ anywhere on the Oneida Nation in Wisconsin’s Reservation on May 5, 2013…
Was it all a part of a scheme between GCF/ACF, OSGC-subsidiaries Green Bay Renewable Energy LLC, Oneida Energy Inc. and OSGC’s partner in Oneida-Kodiak Construction, Alliance Construction & Design/P2O Technologies, among others, to defraud the General Tribal Council of the Oneida Nation in Wisconsin and individual investors, some of whom sued & got their money back while GTC is left encumbered with $5 – $15 million of its money taken by GBRE/OEI/OEBI’s ‘Sole Managing Director’ John Breuninger and given in a secret settlement payment to Atty. Eric R. Decator’s GCF/ACF?
Oneida Eye reported that on Monday, February 22, 2016, Oneida Eye’s Publisher was informed by Oneida Law Office Deputy Chief Counsel James Bittorf that at some point in time (although Atty. Bittorf did not say when, other than indicate that it was after the companies’ Boards had been dissolved) Former Tribal Planning Director John Breuninger was made ‘Sole Director’ of Oneida Energy Inc., Oneida Energy Blocker Corp. & Green Bay Renewable Energy LLC (although OLO Dept. Chief Counsel Bittorf did not say by whom), and that John Breuninger single-handedly made the decision to pay an undisclosed amount of Tribal money (although Atty. Bittorf said he was “not comfortable” revealing how many millions of dollars) to settle the lawsuit filed against those OSGC subsidiaries by Evanston, IL-based Generation Clean Fuels, ACF Leasing & ACF Services against OSGC’s subsidiaries.
After ignoring several previous requests by Oneida Eye’s Publisher for updated copies of the lawsuit’s court filings, OLO Dept. Chief Counsel Bittorf finally provided Oneida Eye’s Publisher with a copy of the Order for Dismissal when she went to his office in person:
- February 1, 2016 Order for Dismissal Pursuant to Settlement, Cook County IL Case # 14-L2768, ACF Leasing LLC, ACF Services LLC & Generation Clean Fuels LLC v. Green Bay Renewable Energy LLC, Oneida Energy Inc. & Oneida Energy Blocker Corp.
HOWEVER, as Oneida Eye has reported, on October 21, 2015, Oneida Tribe members received a letter in the mail from the Oneida Business Committee (which was dated September 23, 2015) stating that the OBC had declined a settlement offer by the Plaintiffs which would have allowed the Oneida Tribe to settle the matters described above for $9 million:
The OBC’s letter clearly stated regarding the latter lawsuit:
The Oneida Business Committee received a request from the plaintiffs to consider settlement. The complaint alleges $400 million in damages; the settlement offer was $9 million. We discussed this settlement in Executive Session on August 26, 2015, and rejected this offer. We believe that the Tribe has not damaged ACF in any way and was not a party to the contract. As a result, the settlement offer is too high to be considered. We do not make a counter-offer as we continue to believe that the Tribe will prevail in this matter. However, if a settlement offer is presented which we think fairly represents the risk and cost of continuing versus concluding this matter, we have committed to bringing that to the General Tribal Council for action.
Then how & why was John Breuninger allowed to make that major decision all on his own as Atty. Bittorf claimed, which is believed to have cost the Oneida Nation in Wisconsin between $5 TO $15 MILLION ON TOP OF THE $10 MILLION LOST TO NATURE’S WAY TISSUE & OSGC-subsidiary GREEN BAY RENEWABLE ENERGY, rather than bringing that very impotant & costly matter before GTC for action just as the OBC plainly told GTC in writing that they would?
It’s ALL MORE PROOF of the OBC’s LIES and VIOLATIONS of General Tribal Council’s authority & Tribe members’ rights…
…all while the OBC & the OLO are PROTECTING CORRUPT TRIBAL CORPORATIONS – whose Boards the OBC appoint & oversee – that POCKET and WASTE TENS OF MILLIONS of the Tribe’s dollars on EXECUTIVES’ INFLATED SALARIES … and LAWSUITS … and PYROLYSIS PONZI SCHEMES… and ENERGY SCAMS with local NOT-SO-GOOD-OL’-BOYS.
Why didn’t the OBC tell GTC about the settlement that John Breuninger paid with the Tribe’s money to Generation Clean Fuels, ACF Leasing & ACF Services at the SATURDAY, February 20, 2016 continuation of the GTC Annual Meeting?
OBC Chair Cristina Danforth claimed to Oneida Eye’s Publisher on MONDAY, February 22, 2016, that she was not informed nor aware of a settlement of any kind being paid by the Tribe nor its corporations. Is that true?
Did any other members of the OBC know about a settlement? None of the five who were at the WEDNESDAY, February 24, 2016 OBC Regular Meeting mentioned it – including OBC Chair Tina Delgado-Danforth.
Surely the Oneida Law Office knew and it was brought up during the TUESDAY, February 23, 2016 OBC Executive Session? Right, OLO? Right, Atty. Bittorf? Right, Chief Counsel Jo Anne House? Right, Tina? Hello?
So when & what will OBC eventually tell GTC now that there is no longer any litigation involving OSGC – which the OBC said was necessary to conclude before they could comply with GTC’s unambiguous December 15, 2013 directive to OBC to completely DISSOLVE OSGC?
So when will OBC FINALLY do what GTC – THE SUPREME GOVERNING BODY OF THE ONEIDA NATION IN WISCONSIN – voted to direct the OBC to do more than THREE YEARS ago?
Instead – at great expense – the OBC appointed Gene Keluche‘s Sagestone Management, LLC, based in Colorado (of all places) to act as the ‘Managing Agent‘ for OSGC. Keluche is also Former Director of the Colorado-based Native American Bank NA, of which OBC Chair Cristina Danforth sits on both NABNA’s Board of Directors and the Native American Bancorporation Board of Directors. (More information about who else works for NABNA below.)
Obviously, the OBC lied to the GTC in writing about bringing any settlement decision before GTC for action, and the result of the OBC’s & OSGC’s ongoing corruption scandals is the mysterious loss of many more MILLIONS of dollars of GTC’s money at Tribe member John Breuninger’s sole discretion.
How many more MILLIONS OF DOLLARS of General Tribal Council’s money did John Breuninger SECRETLY and UNJUSTLY hand over to Eric Decator & Generation Clean Fuels LLC with the blessing of the OBC for what looks like a possible SHAKEDOWN in an EXTORTION SCHEME that might be linked to Ron Van Den Heuvel’s expansive & pervasive fraud schemes?
WERE THOSE SECRET MILLIONS OF GTC’s DOLLARS ACTUALLY USED TO PAY OFF OTHER DEFRAUDED GCF INVESTORS – INCLUDING ONEIDA TRIBE MEMBERS, AND TRIBAL OFFICERS & EXECUTIVES – IN ORDER FOR GCF AND OSGC TO AVOID EVEN MORE LAWSUITS, AS WELL AS POSSIBLE POTENTIAL CRIMINAL CHARGES FOR WHAT MAY AMOUNT TO NOTHING BUT A PYRAMID SCAM & PONZI SCHEME?
Current OBC Chair CRISTINA DANFORTH declared personal Bankruptcy in 2014 and regularly fails to attend & chair 50% of OBC Meetings, as well as General Tribal Council Meetings due to travel to Colorado and other states because she just happens to also be the…
President of the Native American Finance Officers Association / NAFOA Board of Directors …
and is also on the Board of Directors of both the Native American Bank, NA & the Native American Bancorporation Co. which is located in Wayde McKelvy’s home-state…
COLORADO… (of all places! More on that below).
While she was OBC Treasurer Cristina Danforth travelled in order to promote Ron Van Den Heuvel’s & OSGC’s fraud schemes to other tribes as a safe & sound investment, as did OBC Member & OSGC Liaison Brandon Yellowbird-Stevens.
But wait…
Guess who else just happens to work at the Native American Bank NA located in Colorado (of all places!)…
Shannon Loeve, Native American Bank NA’s Vice-President & Senior Relationship Manager for the Lending Department
SHANNON LOEVE … (does that name ring a bell, GTC members?) …about whom the 2015 Native American Bank NA Annual Report says on page 11:
Native American Bank is pleased to welcome Shannon Loeve as the Vice President and Senior Relationship Manager to oversee our Lending Department. Shannon Loeve’s skills and experience will complement Native American Bank’s established expertise in state and federal government guaranteed lending, economic development and sustainability in Indian Country. She will focus on maintaining the current relationships and expanding the loan portfolio.
“We are fortunate to have Shannon come to Native American Bank with her expertise and knowledge of lending in Indian Country” said Thomas Ogaard, [NABNA] President and CEO.
Prior to joining Native American Bank, Shannon was the Principle Project Manager for the Tribal Energy Program at New West Technologies, LLC and served as Interim Chief for the Division of Capital Investment at the U.S. Department of Interior, providing nationwide management for the Indian Loan Guarantee Program. Shannon was a lender at Native American Bank when she had accepted the position at the Department of Interior and she is very familiar with Native American Bank’s lending activity. Shannon is a graduate of University of Wyoming and an enrolled member of the Northern Arapaho Tribe of the Wind River Reservatioin. [sic]
The NABNA 2015 Annual Report states in a timeline on page 5:
2014 … Achieved near break-even performance with the help of a Bank Enterprise Award from the U.S. Department of the Treasury. We became a dominant institution in the utilization of BIA loan guarantees, accounting for nearly 30% of all dollars under this type of guarantee in the country.
Nice revolving-door ya got there, NABNA!
GTC members and Oneida Eye readers might recall that Ron Van Den Heuvel’s incinerator fraud scheme partners, Oneida Seven Generations Corporation, invited two guests to the April 11, 2011 GTC Special Meeting:
1) Abdul Latif Mahjoob of American Combustion Technologies Inc. / ACTI, who was invited to discuss his working partnership with OSGC and OSGC-subsidiaries Oneida Energy Inc. and Green Bay Renewable Energy, LLC, to build a municipal solid waste incinerator that ACTI & OSGC claimed would profitably produce electricity & other products, exactly as ACTI business partner Green Box NA Green Bay, LLC’s Ron Van Den Heuvel proposed in his fraudulent sales literature for that now bankrupt company.
Who did OSGC invite to explain to GTC whether or not the Oneida Tribe of Indians of Wisconsin / Oneida Nation in Wisconsin would have to pay back debts encumbered by Tribally owned corporations and their subsidiaries:
2 ) Shannon Loeve …as seen in the transcript and heard in the audio recording
Below is an excerpt from the Transcript of April 11, 2011 GTC Meeting, starting on page 17:
Former OSGC CEO, Oneida Energy, Inc., CEO and Green Bay Renewable Energy, LLC, President Kevin Cornelius [WARNING! Much of what Kevin says is false and/or misleading, at best]: Ok, one of the questions we [were asked] on the funding and what we’d like to do; there was an insinuations, actually it was not an insinuation; it was just plainly said that we shouldn’t get one more dime, or we shouldn’t invest any money in this. So the funding, the sources, the amount of money that we are getting from the Oneida Tribe is zero. We have not received money from the Oneida Tribe since 2004. So, for this project, we’re getting no money to do this project. There was mention before that we talked about a grant and it wasn’t a grant, but we have two grants. One from the state for $2 million; we have another grant from the Federal Government for $584,000 and we have that information you can see that we’ve shared that with the BC and it is from the [Wisconsin] Department of Commerce grant. Also we have a loan guarantee from the Federal Government for $19 million and that is a program set up by the Bureau. Actually, I’m going to get through this and then…. What we do also have from the state is a low interest, non-secured loan. So we have a $2 million low-interest loan which we don’t have to put up any collateral for, and we also have a $2 million grant. So that brings the total project, sources of funding that we have received up to $24 million and that is the cost of the project. I would like to ask Shannon [Loeve], she is here and she can maybe talk a little bit about the loan guarantee program and the amount of, as far as somebody said there wasn’t any kind of money guaranteed or committed. So I’ll let her answer that question. …
Shannon Loeve: Hello, my name is Shannon Loeve and I’m with the Division of Capital Investment. We are an agency under the Office of Indian Energy and Economic Development. My office is responsible for adminstrating the Loan Guarantee Program, and you’ve heard it referred here tonight as the BIA Loan Guarantee Program. It’s the same thing. People are more familiar with the BIA Loan Guarantee Program. We are a federal agency. We provide a 90 percent loan guarantee to the lender. So we don’t actually give any money, we don’t fund the program. What we do is we provide an added insurance to the lender who is actually fronting the money, to give them an incentive to make the loan. The purpose of our program is to provide capital to Indian Country. Basically, the intention of our program is to help lenders make loans that they may not otherwise be able to make, simply because they are located on a reservation or because they are a start-up enterprise. There’s generally something about the actual loan that’s requested that prohibits them from making the loan that is specific to Indian Country. The general intention behind our program is to have an economic impact in Indian Country. With that being said, I’ll go ahead and just take questions now.
Former OBC Chair Rick Hill: Any questions about the Loan Guarantee Program?
Kevin Cornelius: Question is, that was mentioned before, was the money committed to the Tribe?
Shannon Loeve: I think what’s important to make note of right now is that the Loan Guarantee has not been approved. What we did is we obligated funds from last year’s budget. To put that into perspective, I think what you saw here is $19 million, is what we’ve obligated toward the project. We have to do our due diligence and we have to know the project is going to meet all of our requirements under our regulation, prior to making it an obligation. So the $19 million that we’re talking about, in the context of our budget last year, our entire guarantee was $89 million. So that is a huge portion of what we were able to provide last year, so we couldn’t make that obligation, we wouldn’t take that lightly. If we make the obligation to an organization or borrower, those funds cannot be used by any other group. Because we know that we have limited resources, we wouldn’t possibly make that obligation without knowing that this is a project that we wanted to see happen.
Rick Hill: Brandon?
OBC member & OSGC Liaison Brandon Stevens: One of the questions that I got from a lot of Tribal members, over and over again was, in worse case scenario, what would happen in case of a default?
Shannon Loeve: In the case of a default, what happens is the lender has the ability to make a claim for loss to my program. We pay the lender their 90 percent. 90 percent of their balance. At that point we take over the note, we being the Federal Agency, and we begin to see if there is some way that we can collect on the guarantee. Either it’s liquidation; if we got a viable business, we will try to restructure the loan and so forth. I think the real question that we’re getting at is whether or not the Tribe is on the hook for this. The answer to that is that our obligation is actually to the corporation, it is not the Tribe and in the event of a default, there is no recourse to the Tribe. …
Yvonne Metivier: This [question is] definitely about the DOI/BIA Guaranteed Loan Office. Yes, Pat [Cornelius], I was the spy who went to Washington D.C. at the end of February and I met with Phil Viles[, Chief of the Division of Capital Investment in the DOI’s Office of Indian Energy & Economic Development]. Almost everything that you say is exactly what Phil Viles told us – it has not yet been approved. However, what is going on now is that Doherty Limited, the finance company, may have approved this loan but the DOI/BIA has not guaranteed Doherty and they may change that process. Phil Viles has sent us an e-mail that this is not a done deal. He also sent us an e-mail in September, which I gave to the Business Committee. Phil Viles is the one who signed off on this and he told me in person. I went, an old lady, dragging my bad foot. ..poor me, but I wanted to ask him in person – what is going on? He said yes, they do allocate the money but there [are] other projects they may give it to because [OSGC] has not yet met the standards that they need to, to approve the loan. That is my bottom line.
Shannon Loeve: I would like to point out, you made the observation that the money has been allocated but the funding, the ability to provide a guarantee from those funds that have already been obligated, could go elsewhere. The answer to that is no. The obligation is specific to the borrower and because we are in a different fiscal year, we obligated from last year’s fiscal year. So those funds cannot go elsewhere and because we knew that, I guess I want to reiterate that our due diligence prior to obligating those funds was extensive. We worked with the lender. We made sure that all of the documentation requirements were met. Again, we’re governed by regulation. There are minimum standards that we have to meet. …
Rick Hill: …Now I’m going to have Tina explain. There were questions about the guaranteed loan and how it works and where the liabilities lie, so we’ll have her quickly do that so you got a fuller understanding of the Bureau Guarantee Program.
Then-OBC Treasurer & current OBC Chair Cristina Delgado-Danforth: Good evening, everybody. I’m just going to be brief in my comments. I just wanted to explain that in order to apply for a BIA guaranteed loan, as Shannon said, they are guaranteeing the loan by 90 percent. [OSGC] is liable for the other 10 percent regardless, but in the case that we aren’t able to make our obligations to the lender, the BIA makes that obligation for us. There was a lot of due diligence, a lot of regulatory requirements that have to go forward in order for us to even get a guaranteed loan. This is a good thing and one of the reasons why BIA has guaranteed loans is because a lot of Tribes, all throughout the United States, even gaming Tribes and Tribes with other resources of revenue, still have difficulty getting access to capital. So Oneida Seven Generations is a corporation of the Tribe, but they are separate from the Tribe for the reasons of liabilities. So that in the event that they’re liable for anything, they are sued for anything, that it was the corporation that is financially responsible and obligated, not the Tribe and that’s the difference between being a corporation of the Tribe and the Tribe itself being liable. So I just wanted to explain that it’s a very rigorous process and we are very glad that the BIA has guaranteed this loan on behalf of [OSGC]. And I know there’s a lot of a historical problems with some of the past financials of Seven Gens, but that was before Kevin Cornelius’ time, that was before this current board’s time. And so your comments are heard and I understand why they are being made, but I appreciate everyone’s patience and I especially appreciate the attentiveness of our guests[, Abdul Latif Mahjoob of ACTI, and Shannon Loeve then from DOI/BIA and currently Vice President at NABNA, NA]. Thank you …
Yet now, somehow, somewhere, behind closed doors and at the sole discretion of Former Oneida Tribal Planning Director John Breuninger, who was authorized as the ‘Sole Managing Director’ for OSGC’s subsidiaries by parties that Deputy Chief Counsel Atty. James Bittorf told Oneida Eye’s Publisher that he was “not comfortable disclosing,” seven or eight figure sums were secretly and unaccountably allowed to be paid with Tribal dollars in undisclosed and supposedly confidential settlement agreements that had to have been ultimately approved by the Oneida Business Committee as Chaired by Cristina Danforth, who is on the Board of the Native American Bank/NABNA which benefits from tribes taking out BIA-guaranteed loans, be it for good reasons or to fund fraud schemes like the one Tina Danforth travelled to advocate as a sound economic development opportunity for Tribes on behalf of the Oneida Nation in Wisconsin and Tribally-owned OSGC (of which her sister was a Board member) while Tina Danforth is also President of the Native American Finance Officers Association/NAFOA, which supposedly represents the kind of people who should have been and should be blowing the whistle loud and long about Ron Van Den Heuvel & OSGC’s types of fraud schemes a long time ago instead of trying to defend them …or sweep them under the rug.
So much for all that so-called “due diligence” … which amounted to epic fail at every level of the process.
A lot of good that does when the General Tribal Council has to endure $15 to $30 Million in losses to fraud schemes due to the actions and inactions of the Oneida Business Committee and the Tribal corporations whose Boards the OBC appoints and is supposed to oversee and hold accountable.
Oh… by the way…
Atty. Eric R. Decator
Did we forget to mention that Atty. Eric R. Decator of Generation Clean Fuels LLC which received an undisclosed multi-million settlement from the person secretly made Sole Director of OSGC’s subsidiaries in what looks like a possible extortion shakedown associated with a pyramid pyrolysis Ponzi scheme just also happens to be the Former Assistant Attorney General for the State of…
(wait for it)
COLORADO?
(Of all places!!!)
See also:
- April 12, 2011 State of Washington Dept. of Financial Instiutions, Securities Division Statement of Charges & Notice of Intent to Enter an Order to Cease & Desist, to Impose a Fine, and to Charge Costs to NewEarth Renewable Energy Inc. & Ahava Amen (aka Adolph Amen-Ra, aka Adolphus A. Allwood)
- Findings of Fact, Conclusions of Law and Initial Order in the Matter of NewEarth Renewable Energy Inc. & Ahava Amen (aka Adolph Amen-Ra, aka Adolphus A. Allwood), OAH Docket No. 2011-DFI-25
- More information & documentation about NewEarth Renewable Energy Inc. & Ahava Amen (aka Adolph Amen-Ra, aka Adolphus A. Allwood, among his dozens of aliases)
