The previous CFO of a particular goal acquisition firm (SPAC) was sentenced to 3 years in jail after embezzling $5 million that was used to commerce cryptocurrencies and “meme shares.”
An April 27 press launch from the Division of Justice (DOJ) mentioned Cooper Morgenthau, the ex-CFO of African Gold Acquisition Corp. (AGAC), embezzled greater than $5 million from three totally different SPACs — AGAC, Strategic Metals Acquisition Corp I (SMAC I) and Strategic Metals Acquisition Corp II (SMAC II) between June 2021 and August 2022.
Former chief monetary officer of two SPACs sentenced to 36 months in jail for fraud schemehttps://t.co/ZOvi2ksEi1
— US Legal professional SDNY (@SDNYnews) April 27, 2023
In accordance with a associated civil criticism from the U.S. Securities and Trade Fee (SEC), Morgenthau wired roughly $1.2 million in funds from African Gold to his personal private accounts the place he used 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 that led to “materials misstatements” within the firm’s public monetary data.
In the meantime, Morgenthau raised one other $4.7 million from personal 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 really used the freshly-raised capital to not solely cowl his losses at African Gold however to additionally proceed additional buying and selling of cryptocurrencies and meme shares.
On the time, SMAC I used to be within the strategy of elevating cash from personal traders forward of its preliminary public providing (IPO).
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 1 depend 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 as we speak’s sentencing of Cooper Morgenthau, SPAC promoters have been despatched a message that fraud within the SPAC markets will probably be punished, and greed on Wall Road will probably be met with critical penalties,” U.S. Legal professional Damian Williams mentioned within the assertion.
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