On top of his prison sentence, the man will have to forfeit $5.1 million and pay an additional $5.1 million in restitution.
The ex-CFO of a special purpose acquisition company (SPAC) received a three-year prison sentence for stealing $5 million to trade cryptocurrencies and "meme stocks."
According to the United States Department of Justice press release, Cooper Morgenthau, the former CFO of African Gold Acquisition Corporation (AGAC), embezzled funds from three SPACs between June 2021 and August 2022.
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The US Securities and Exchange Commission (SEC) revealed that Morgenthau transferred about $1.2 million from African Gold to his personal accounts for trading equities and options of cryptocurrencies and meme stocks. After facing losses, he falsified documents and provided them to accountants and an auditor at African Gold, causing "material misstatements" in the company's public financial records.
Morgenthau also raised $4.7 million from private investors in a separate SPAC, falsely claiming that the funds would be used for launching another SPAC. Instead, he utilized the capital to cover his losses at African Gold and continued trading cryptocurrencies and meme stocks.
In August 2022, African Gold discovered the fraudulent withdrawals, terminated Morgenthau, and reported his misconduct to the SEC.
On January 3rd, Morgenthau pleaded guilty to one count of wire fraud. Along with his three-year prison sentence, the man was ordered to forfeit $5.1 million and pay an additional $5.1 million in restitution.
US Attorney Damian Williams emphasized that this sentencing sends a message that fraud in the SPAC markets will be met with severe consequences, deterring greed on Wall Street.
With today’s sentencing of Cooper Morgenthau, SPAC promoters have been sent a message that fraud in the SPAC markets will be punished, and greed on Wall Street will be met with serious consequences.
At the end of March, the Department of Justice revealed that Michael Alan Stollery, the founder and CEO of Titanium Blockchain Infrastructure Service Inc (TBIS), will spend four years and three months in prison for promoting TBIS as a crypto investment opportunity, using “false and misleading information.”
