A Maryland man has been ordered to pay nearly $6 million for his role in an alleged pyramid scheme and is permanently banned from the state’s securities industry.
A court this week upheld a $5.9 million civil fine against Stanley Richards, a Prince George’s County resident who promoted investment offerings from NovaTech Ltd., a cryptocurrency and foreign currency trading operation accused by the Securities and Exchange Commission of defrauding more than 200,000 investors worldwide.
Federal regulators brought fraud charges against the firm in 2024, saying that in the preceding five years, “NovaTech used the majority of investor funds to make payments to existing investors and to pay commissions to promoters, using only a fraction of investor funds for trading.”
Richards started offering and selling NovaTech’s investment contracts to Maryland investors in 2021, state officials said, even though he wasn’t registered as an investment adviser.
About 3,000 Maryland residents invested in NovaTech and at least 148 of them were victims of the scam, losing an estimated $37 million, the state attorney general’s office said.
“Marylanders and their families were swindled out of millions of dollars by this aggressively promoted and unlawful pyramid scheme,” Maryland Attorney General Anthony Brown said in a news release. “The Securities Division will always hold accountable con artists who target Marylanders’ hard-earned savings.”
Richards had challenged the state’s order, but the Prince George’s County Circuit Court upheld it.
Prosecutors said Richards aggressively promoted the scheme on YouTube, social media and online video calls.
Worldwide, NovaTech investors deposited between $600 million and $1 billion in cryptocurrency between 2019 and 2023.
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