Serial Fraudster Sentenced to 18 Years in Prison for Swindling Investors out of $17 Million in Stock Manipulation and Money Laundering Schemes

Earlier today, in federal court in Brooklyn, Richard Dale Sterritt, Jr., also known as “Richard Richman,” was sentenced to 18 years in prison by United States District Judge Kiyo A. Matsumoto for conspiracy to commit securities fraud and wire fraud, multiple counts of securities fraud, and conspiracy to commit money laundering.  The charges relate to a scheme to defraud investors in Zona Energy, an oil and gas exploration company in Texas, and a scheme to manipulate stock in OrgHarvest, Inc., a publicly traded company that Sterritt controlled.  In total, Sterritt raised approximately $17 million from investors and misappropriated most of the money.  As part of the sentence, Sterritt was ordered to forfeit approximately $17 million in fraudulently obtained gains and pay approximately $16.3 million in restitution to his victims.  Sterritt pleaded guilty to the charges in November 2023.  Sterritt had previously been convicted on federal securities fraud charges and imprisoned for five years for his role in a nearly identical fraud scheme.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, and Christopher G. Raia, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

“For years, Richard Sterritt preyed on unsuspecting investors and betrayed their trust by spending their money on expensive cars, luxury goods, and high-end travel,” stated United States Attorney Nocella.  “Today’s sentence punishes Sterritt for his crimes and protects the public from this serial fraudster.  My Office is committed to protecting the investing public and the integrity of the markets from white-collar criminals like the defendant.”

Mr. Nocella thanked the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) for their invaluable assistance in the investigation.

“Despite his prior conviction for a similar conspiracy, Richard Sterritt once again facilitated the theft of more than $17 million from trusted investors and shareholders through misrepresentations while separately attempting to manipulate the stock of another company,” stated FBI Assistant Director in Charge Raia.  “Sterritt's multiple attempts to defraud investors reflects his relentless pursuit to use others' money to fund his personal lifestyle and businesses.  May today's sentencing emphasize the FBI's continued commitment to investigate any individual who manipulates our economic market to line their own pockets.”

The Zona Energy Scheme 

Between March 2018 and January 2021, Sterritt and his co-defendants James Christopher Pittman, Mark Ross, and Robert Magness defrauded investors in an early-stage oil-and-gas company called Zona Energy.  Sterritt used a series of sham entities and nominees to conceal his control of Zona Energy.  Sterritt also concealed his criminal history from investors and potential investors by adopting the alias “Richard Richman.”  The co-conspirators made a series of misrepresentations about Zona Energy’s business, management, and use of proceeds from the offering, ultimately raising approximately $17 million from investors.  Sterritt and his co-conspirators misappropriated more than $10 million of the proceeds to purchase luxury items, pay personal expenses, or funnel funds into other businesses Sterritt controlled, including a cannabis company.

The ORGH Market Manipulation

To cover up the Zona Energy scheme, Sterritt, Ross, and Magness conspired with an undercover FBI agent (the “Undercover Agent”) posing as a corrupt stockbroker to manipulate the price and trading volume of publicly traded shares of stock in OrgHarvest, Inc., which traded under the stock ticker “ORGH.”  Sterritt, who secretly controlled the majority of ORGH shares through trusts in the names of his associates, 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. Between approximately May 19, 2020 and May 28, 2020, the co-conspirators placed test matched trades at the pre-determined prices and volumes agreed to with the Undercover Agent.  The ORGH Market Manipulation scheme was halted by regulators on June 1, 2020 before the co-conspirators could trade larger blocks of shares.

In addition, Sterritt and his co-defendants, including Michael Greer and Sterritt’s ex-wife Robyn Straza, laundered the proceeds of the schemes by facilitating financial transactions to conceal and promote the fraudulent schemes, including by transferring investor funds through a series of bank accounts controlled by the defendants.  Furthermore, Sterritt obstructed the administration of justice when he directed co-conspirators to create fake and backdated documents and sent them to the SEC in response to subpoena requests.

All six defendants in the case have pleaded guilty.  Straza was sentenced to 10 months in prison; Ross was sentenced to three months in prison; Greer, Magness, and James Christopher Pittman are awaiting sentencing.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Sarah M. Evans, Nick M. Axelrod, and Jessica K. Weigel are in charge of the prosecution.

The Defendant:

RICHARD DALE STERRITT, JR. (also known as “Richard Richman”)
Age: 67
Residence: Garland, Texas

Co-Defendants Who Previously Pleaded Guilty:

MICHAEL GREER
Age: 48
Dallas, Texas

ROBERT MAGNESS
Age: 54
New York, New York

JAMES CHRISTOPHER PITTMAN
Age: 52
Dallas, Texas

MARK ROSS
Age: 56
Parkland, Florida

ROBYN STRAZA
Age: 61
Dallas, Texas

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