The US Department of Justice has informed that the former chief financial officer of a special purpose acquisition company (SPAC) has been sentenced to three years in prison for embezzling $5 million.
Executives were trading cryptocurrencies and “memetic stocks” with stolen funds.
- according to the official press release, U.S. District Judge Paul A. Engelmeyer has sentenced Cooper Morgenthau, former Chief Financial Officer of African Gold Acquisition Corporation (AGAC), to 36 months in prison. I (SMAC I), and Strategic Metals Acquisition Corporation II from June 2021 to August 2022.
- The funds were then used to trade “memetic stocks” and cryptocurrency stocks and options.
- Morgenthau lost almost all of the stolen money. The former executives forged bank statements and provided them to the company’s accountants and auditors to conceal and facilitate embezzlement from AGAC.
- Authorities said his actions resulted in “material misrepresentation” in AGAC’s public filings with the Securities and Exchange Commission (SEC).
- The 36-year-old Florida resident has raised another $4.7 million from private investors in a SPAC separate from African Gold.
- He falsely claimed that the money would be used to launch yet another SPAC. A new capital injunction was then used to cover losses in African Gold and to continue trading cryptocurrencies and meme stocks.
U.S. Attorney Damian Williams said:
“Today’s Cooper Morgenthau ruling sends a message to SPAC promoters that fraud in the SPAC market will be punished and greed on Wall Street will face serious consequences.”
- The former executive previously pleaded guilty to one count of wire fraud. In addition to a prison term, Morgenthau was ordered to forfeit more than $5.1 million of his and equal reparations.
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