• Fri. May 14th, 2021

Five Individuals Charged in Offering Fraud

Five Individuals Charged in Offering Fraud

Five Individuals Charged in Offering Fraud, Stock Manipulation and Money Laundering Schemes

Defendants Misappropriated More Than $10 Million and Used the Proceeds to Purchase Luxury Items, Plastic Surgery and a Bentley Automobile

(STL.News) A five-count indictment was filed today in federal court in Brooklyn charging Richard Dale Sterritt, Jr., Michael Greer, Robert Magness, Mark Ross and Robyn Straza with conspiracy to commit securities fraud, wire fraud and money laundering, among other offenses.  The charged crimes arise out of a series of securities fraud schemes, including an offering fraud targeted at investors and potential investors in an oil and gas company in Texas and the attempted manipulation of the publicly traded stock of a cannabis company.  The defendants were arrested today.  Sterritt, Greer and Straza will make their initial appearance in federal court in Dallas, Texas; Magness and Ross will make their initial appearance in Brooklyn.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and indictment.

“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,” stated Acting U.S. Attorney Lesko.  “This Office will identify and vigorously prosecute those who take advantage of investors to enrich themselves at the expense of the integrity of our financial markets.” Mr. Lesko thanked the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance during the investigation.

“Investor confidence is essential to keeping our financial markets afloat.  Actions like the ones Sterritt, Greer, Magness, Ross, and Straza are charged with today chip away at the faith investors place in the process and have the potential to create far-reaching consequences.  Our office is committed to tackling these types of financial crimes and bringing their perpetrators to justice,” stated FBI Assistant Director-in-Charge Sweeney.

According to the indictment, between March 2018 and January 2021, Sterritt, Greer, Magness and Ross engaged in a series of related fraudulent schemes.  The schemes included an offering fraud in the securities of Zona Energy (the “Zona Energy Offering Fraud”) and a scheme to manipulate the price and trading volume of publicly traded shares of stock in OrgHarvest, Inc., which traded under the stock ticker “ORGH” (the “ORGH Market Manipulation,” and, together with the Zona Energy Offering Fraud, the “Fraudulent Schemes”).  In addition, all of the defendants, including Straza, laundered the proceeds of the Fraudulent Schemes by facilitating financial transactions to conceal and promote the Fraudulent Schemes.

As part of the Zona Energy Offering Fraud, the defendants misappropriated more than $10 million of investor funds through the sale of shares in Zona Energy, an oil and gas exploration production company based in the Permian basin of West Texas.  Sterritt elicited investors in Zona Energy using the alias “Richard Richman.” Sterritt and his co-conspirators made 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 co-conspirators, including Ross, Straza and Greer, misappropriated more than $10 million, including to purchase luxury items, pay personal expenses or funnel funds into other businesses Sterritt controlled, including a cannabis company.

With regard to the ORGH Market Manipulation scheme, Sterritt, Magness and Ross engaged in matched trading to artificially prop up the price of ORGH shares as a part of a scheme to raise revenue and hide the misappropriation from and true financial condition of Zona Energy.  They coordinated those ORGH trades with an undercover law enforcement agent (the “Undercover Agent”) posing as a corrupt stock promoter, who they believed controlled a team of corrupt brokers who would buy the artificially inflated ORGH stock in their customers’ accounts.  Sterritt, who secretly controlled the majority of ORGH shares through trusts in the name of his girlfriends, family members and co-conspirators, agreed with the Undercover Agent to place matched trades at specific prices, volumes and times to inflate the price of ORGH stock

To facilitate the misappropriation of funds from Zona Energy, Sterritt, Greer, Ross and Straza laundered investor money from the sale of Zona Energy shares between bank accounts controlled by Sterritt, Greer and Straza.  In some cases, investor funds were wired between bank accounts for multiple different entities in the name of Greer and/or Straza, or their entities, before those funds were used to pay personal expenses; to purchase luxury goods, including plastic surgery; or provided in cash to Sterritt’s family, friends, girlfriends and to co-conspirators.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of securities fraud or money laundering, they face up to 20 years’ imprisonment.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck and Michael P. Robotti are in charge of the prosecution, with assistance on forfeiture matters from Assistant United States Attorney Laura D. Mantell of the Office’s Asset Forfeiture Section.

The Defendants:

RICHARD DALE STERRITT, JR., (also known as “Richard Richman”)
Age: 64
Garland, Texas

MICHAEL GREER
Age: 45
Dallas, Texas

ROBERT MAGNESS
Age: 51
New York, New York

MARK ROSS
Age: 53
Parkland, Florida

ROBYN STRAZA
Age: 58
Dallas, Texas

E.D.N.Y. Docket No. 21-CR-193 (KAM)

SOURCE: USDOJ.Today

Waqar Nawaz

Waqar Nawaz

Waqar Nawaz has published content for STL.News for approximately three years. He is dedicated to publishing news released by the US Department of Justice. He actively monitors the web for fresh releases to help keep the public informed.