Michael Katz, 30 April 2021
Five people have been charged in federal court for their involvement in two securities fraud schemes. According to prosecutors, the schemes involved an offering fraud of a Texas-based oil and gas company and the attempted manipulation of a cannabis company’s publicly traded stock.
An indictment was filed in the Eastern District of New York against Richard Dale Sterritt Jr., Michael Greer, Robert Magness, Mark Ross, and Robyn Straza charging them with conspiracy to commit securities fraud, wire fraud, and money laundering, among other offenses.
“Through a web of related schemes, Sterritt and his co-defendants allegedly stole millions of dollars from investors, attempted to manipulate a publicly traded stock and laundered the proceeds of their crimes through the purchase of luxury items like a Bentley,” Mark Lesko, acting US attorney for the Eastern District of New York, said in a statement.
According to the indictment, over nearly three years, Sterritt, Greer, Magness, and Ross allegedly committed a series of schemes that included an offering fraud in oil and gas exploration production company Zona Energy securities and a plan to manipulate the price and trading volume of shares of OrgHarvest Inc., which produces, cultivates, and extracts organic cannabis products.
The indictment said Sterritt lured investors in Zona Energy using the alias “Richard Richman.” It also accused Sterritt and his co-conspirators of making material misrepresentations about Zona Energy’s business, management, and the use of proceeds from the share offering.
Of the more than $16 million raised from Zona Energy investors in the offering, Sterritt and his associates allegedly misappropriated more than $10 million to purchase luxury items, pay personal expenses, or funnel funds into other businesses Sterritt controlled.