Apr 28, 2023
Former CFO Sentenced to 3 Years for Embezzling $5M in Crypto & Meme Stocks
The Department of Justice (DOJ) recently announced that Cooper Morgenthau, the former Chief Financial Officer (CFO) of African Gold Acquisition Corp (AGAC) and two other Special Purpose Acquisition Companies (SPACs), has been sentenced to three years in prison for embezzling $5 million from the companies.
Morgenthau had wired approximately $1.2 million from AGAC to his personal accounts and used the money to trade cryptocurrencies and so-called meme stocks. Unfortunately, he lost almost all of the funds. To cover his losses, he then provided falsified documents to accountants and an auditor at African Gold ahead of its public filing with the SEC that led to “material misstatements” in the company’s public financial records.
In addition, he raised another $4.7 million from private investors in a SPAC separate from African Gold based on the fraudulent claim that the money would be used to launch yet another SPAC. This money was then used to cover his losses at African Gold and to continue further trading of cryptocurrencies and meme stocks.
Upon discovery of the withdrawals in August 2022, African Gold fired Morgenthau and informed the SEC of his malpractice. On January 3, Morgenthau pled guilty to one count of wire fraud. In addition to his three-year prison sentence, he was also ordered to forfeit $5.1 million and pay further restitution of $5.1 million.
U.S. Attorney Damian Williams commented on the sentencing, saying, “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.”
The incident serves as a reminder of the importance of exercising caution when investing in the web3 space. As the crypto industry continues to grow, investors should be aware of the potential risks and take necessary steps to protect their investments.
In particular, investors should be aware of the potential for NFT fraud. NFTs are a type of digital asset that can be used for a variety of purposes, including marketing, promotion, and selling. Unfortunately, there have been numerous cases of fraud and scams related to NFTs.
To protect themselves, investors should only purchase NFTs from reputable sources, use a secure wallet to store their assets, and research any companies they are considering investing in. Additionally, investors should be aware of the potential for NFT marketing scams and consult a web3 agency or NFT marketing agency for advice on the best way to promote their NFTs on social media platforms such as Twitter.Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.