Five people have been charged in federal court for their involvement in two securities fraud schemes. According to prosecutors, the schemes involved fraud on the bid from a Texas-based oil and gas company and attempted manipulation of publicly traded shares of a cannabis company.
An indictment has been 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 network of related schemes, Sterritt and his co-defendants allegedly stole millions of dollars from investors, attempted to manipulate publicly traded stock and laundered the proceeds of their crimes by buying luxury items like a Bentley,” Mark Lesko, acting US attorney for the eastern district of New York, said in a statement.
According to charge, over nearly three years, Sterritt, Greer, Magness and Ross allegedly committed a series of ploys that included bid fraud in the securities of the oil and gas exploration production company Zona Energy and a plan to manipulate the price and volume of shares of OrgHarvest Inc., which produces, cultivates and extracts organic cannabis products.
According to the indictment, Sterritt lured Zona Energy investors using the pseudonym “Richard Richman”. He also accused Sterritt and his co-conspirators of making material misrepresentations about the business, management and use of the proceeds from the Zona Energy share offering.
Of the more than $ 16 million raised from Zona Energy investors as part of the offer, Sterritt and his associates are said to have misappropriated more than $ 10 million to buy luxury items, pay for personal expenses or funnel funds. in other companies controlled by Sterritt.
In connection with the alleged market manipulation of OrgHarvest, Sterritt, Magness and Ross are accused of engaging in counterparty transactions to artificially inflate the price of OrgHarvest shares in order to increase income and conceal the embezzlement of Zona Energy.
But the indictment says the defendants coordinated OrgHarvest’s dealings with an undercover law enforcement officer posing as a corrupt stock promoter. They believed the undercover agent was controlling a team of corrupt brokers who would buy the artificially inflated OrgHarvest shares in their clients’ accounts.
Sterritt, who the indictment says secretly controlled the majority of OrgHarvest shares through trusts on behalf of his girlfriends, family members and co-conspirators, agreed with the agent undercover to place corresponding trades at specific prices, volumes and times to support the share price.
Sterritt, Greer, Ross and Straza are also said to have laundered investor money from the sale of Zona Energy shares between bank accounts controlled by Sterritt, Greer and Straza.
In some cases, investor funds would have been wired between the bank accounts of several different entities on behalf of Greer and / or Straza or their entities. The ill-gotten funds were said to have been used for personal expenses, luxury goods, plastic surgery, and to provide cash for Sterritt’s family, friends, girlfriends and co-conspirators.
If convicted of securities fraud or money laundering, the five face up to 20 years in prison.
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Tags: Mark Ross, Michael Greer, Money laundering, Richard Dale Sterritt, Robert Magness, Robyn Straza, securities fraud, wire fraud, Zona Energy