Ex-CFO who stole $5M to commerce crypto and ‘meme shares’ will get 3 years in jail


The previous chief monetary officer of a particular goal acquisition firm (SPAC) was sentenced to 3 years in jail after embezzling $5 million, which he used to commerce cryptocurrencies and “meme shares.“

An April 27 press launch from america Division of Justice mentioned Cooper Morgenthau, the previous chief monetary officer of African Gold Acquisition Company (AGAC), embezzled greater than $5 million from three completely different SPACs: AGAC, Strategic Metals Acquisition Company I (SMAC I) and Strategic Metals Acquisition Company II between June 2021 and August 2022.

In accordance to a associated civil criticism from the U.S. Securities and Change Fee (SEC), Morgenthau wired roughly $1.2 million in funds from African Gold to his private accounts, utilizing the cash to commerce equities and choices of cryptocurrencies and so-called meme shares.

In doing so, he misplaced virtually all the funds.

Following the losses, he then offered falsified paperwork to accountants and an auditor at African Gold forward of its public submitting with the SEC, which led to “materials misstatements” within the firm’s public monetary information.

In the meantime, Morgenthau raised one other $4.7 million from non-public traders in a SPAC separate from African Gold, based mostly on the fraudulent declare that the cash could be used to launch yet one more SPAC.

Sadly for the traders, Morgenthau used the freshly-raised capital to cowl his losses at African Gold and proceed additional buying and selling of cryptocurrencies and meme shares.

On the time, SMAC I used to be within the means of elevating cash from non-public traders forward of its preliminary public providing.

African Gold found the withdrawals in August 2022, fired Morgenthau, and knowledgeable the SEC of his malpractice.

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Morgenthau, a resident of Florida, pled responsible to at least one rely of wire fraud on Jan. 3. Along with his three-year jail sentence, he was additionally ordered to forfeit $5.1 million and pay additional restitution of $5.1 million.

“With at the moment’s sentencing of Cooper Morgenthau, SPAC promoters have been despatched a message that fraud within the SPAC markets can be punished, and greed on Wall Avenue can be met with critical penalties,” U.S. Legal professional Damian Williams mentioned within the assertion.

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