Ex-CFO that stole $5M to trade crypto and ‘meme stocks' gets 3 years prison

The erstwhile CFO of a peculiar intent acquisition institution (SPAC) was sentenced to 3 years successful situation aft embezzling $5 cardinal that was utilized to commercialized cryptocurrencies and “meme stocks."

An April 27 property release from the Department of Justice (DOJ) said Cooper Morgenthau, the ex-CFO of African Gold Acquisition Corp. (AGAC), embezzled much than $5 cardinal from 3 antithetic SPACs — AGAC, Strategic Metals Acquisition Corp I (SMAC I) and Strategic Metals Acquisition Corp II (SMAC II) betwixt June 2021 and August 2022.

Former main fiscal serviceman of 2 SPACs sentenced to 36 months successful situation for fraud schemehttps://t.co/ZOvi2ksEi1

According to a related civilian complaint from the U.S. Securities and Exchange Commission (SEC), Morgenthau wired astir $1.2 cardinal successful funds from African Gold to his ain idiosyncratic accounts wherever helium utilized the wealth to commercialized equities and options of cryptocurrencies and alleged meme stocks.

In doing so, helium mislaid astir each of the funds.

Following the losses, helium past provided falsified documents to accountants and an auditor astatine African Gold up of its nationalist filing with the SEC that led to “material misstatements” successful the company’s nationalist fiscal records.

Meanwhile, Morgenthau raised different $4.7 cardinal from backstage investors successful a SPAC abstracted from African Gold based connected the fraudulent assertion that the wealth would beryllium utilized to motorboat yet different SPAC.

Unfortunately for the investors, Morgenthau really utilized the freshly-raised superior to not lone screen his losses astatine African Gold but to besides proceed further trading of cryptocurrencies and meme stocks.

At the time, SMAC I was successful the process of raising wealth from backstage investors up of its archetypal nationalist offering (IPO).

African Gold discovered the withdrawals successful August 2022, fired Morgenthau, and informed the SEC of his malpractice.

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Morgenthau, a nonmigratory of Florida, pled blameworthy to 1 number of ligament fraud connected Jan. 3. In summation to his three-year situation condemnation helium was besides ordered to forfeit $5.1 cardinal and wage further restitution of $5.1 million.

“With today’s sentencing of Cooper Morgenthau, SPAC promoters person been sent a connection that fraud successful the SPAC markets volition beryllium punished, and greed connected Wall Street volition beryllium met with superior consequences,” U.S. Attorney Damian Williams said successful the statement.

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