Monthly Archives: April 2021

On April 14, 2021 the Securities and Exchange Commission charged seven individuals, including criminal recidivist Richard Dale Sterritt, Jr., with defrauding investors in a multimillion-dollar oil-and-gas bid racket and related market manipulation scheme.

The SEC’s complaint alleges that, between March 2018 and at least November 2020, Sterritt – who used the pseudonym “Richard Richman” – Michael Greer, Deanna Looney, Robert Magness, Jr., Katie Mathews, James Christopher Pittman, and Mark Ross raised more than $16 million from more than 300 investors through an unregistered private placement of the common stock of Zona Energy Inc., a Dallas-based company that claimed to be focused on the oil and gas industry. According to the complaint, the defendants made various false and misleading statements verbally and in offering materials to solicit investors, including that their funds would be used to support Zona’s operations, namely to develop the mineral rights on a West Texas cattle ranch. The complaint further alleges that instead of using investors’ money to capitalize Zona, Sterritt and his co-defendants misappropriated millions of dollars raised in the offering, using the funds to pay for luxury goods, rental apartments, a car, and to make cash payments to friends, family members, and Sterritt’s girlfriends. Also, according to the complaint, the offering materials falsely claimed that Zona had no debt when the company actually owed millions of dollars in demand notes to various Sterritt-controlled companies.

The Securities and Exchange Commission urges investors to check the background of anyone selling them an investment and to always independently research investment opportunities.  FINRA’s BrokerCheck website is one such source.  When verifiable information is unavailable, generally, one should walk away.

The Securities and Exchange Commission reported on April 6, 2021 that it had secured an asset freeze and other urgent relief in an emergency compliance action against Los Angeles-based actor Zachary Horwitz and his firm, 1inMM (one in a million) Capital, LLC, in connection with an alleged Ponzi scheme that raised over $690 million. Horwitz and 1inMM reportedly told investors that they were purchasing film rights with the intent of reselling them to Netflix and HBO; however, 1inMM had no commercial arrangement with either group.

Horwitz reportedly gave investors fabricated agreements and emails relating to the suspected HBO and Netflix sales. Horwitz guaranteed excessive returns and made them seem possible by using the titles of two well-known film firms and fabricating records. Horwitz misappropriated investment funds for personal use, including the purchasing of his multi-million dollar home, flights to Las Vegas, and payment to a millionaire interior designer. Horwitz falsely claimed to have a track record of successfully selling movie rights to Netflix and HBO when in fact neither Horwitz nor 1inMM had ever sold or done business with these two companies.

The SEC accused Horwitz and 1inMM of violating the antifraud provisions of the federal securities laws. The fact of the matter is that there is nothing unusual about this scam.  Simply put, there was an abundance of people looking to invest money without engaging in adequate due diligence.  As long as investors are willing to be naïve with their savings, there will always be someone out there hawking returns that seem to good to be true.