Ex-CFO Who Stole $5 Million To Trade Crypto Stocks And Even Gets 3 Years In Jail

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The former CFO of a special purpose acquisition company (SPAC) was sentenced to three years in prison after embezzling $5 million that was used to trade cryptocurrencies and meme stocks.”

An April 27 press release from the Department of Justice (DOJ) said that Cooper Morgenthau, the former chief financial officer of African Gold Acquisition Corp. (AGAC), had embezzled over $5 million from three different AGAC SPACs, Strategic Metals Acquisition Corp I (SMAC I) and Strategic Metals Acquisition Corp II (SMAC II) between June 2021 and August 2022.

According to a related U.S. Securities and Exchange Commission (SEC) civil complaint, Morgenthau transferred approximately $1.2 million in funds from African Gold to his own personal accounts where he used the money to trade cryptocurrency stocks and options and so-called meme stocks.

In doing so, he lost almost all of the funds.

Following the losses, he then provided falsified documents to African Gold’s accountants and an auditor prior to its public filing with the SEC, which led to material inaccuracies in the company’s public financial records.

Meanwhile, Morgenthau raised an additional $4.7 million from private investors in a separate SPAC from African Gold based on the fraudulent claim that the money would be used to launch another SPAC.

Unfortunately for investors, Morgenthau actually used the freshly raised capital to not only cover his losses at African Gold, but also to continue trading cryptocurrencies and meme stocks.

At the time, SMAC I was in the process of raising funds from private investors ahead of its initial public offering (IPO).

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

Related: CTFC Wins Record $3.4 Billion Fine in Bitcoin Fraud Case

Florida resident Morgenthau pleaded guilty to one count of wire fraud on Jan. 3. In addition to his three-year prison sentence, he was also ordered to confiscate $5.1 million and pay an additional $5.1 million in restitution.

With today’s sentencing of Cooper Morgenthau, SPAC promoters have received a message that fraud in SPAC markets will be punished and greed on Wall Street will have serious consequences, US Attorney Damian Williams says. in the press release.

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