September 22, 2023

Former African Gold Acquisition Executive Sentenced to Three Years for Cryptocurrency Fraud

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Former African Gold Acquisition Executive Sentenced to Three Years for Cryptocurrency Fraud

Former African Gold Acquisition Corp CFO Cooper Morgenthau has been sentenced to three years in prison for embezzling funds used to trade cryptocurrencies.

According to a press release from the US Department of Justice,Between June 2021 and August 2022, Cooper Morgenthau embezzled over $5 million from African Gold Acquisition Corp, Strategic Metals Acquisition Corp I and Strategic Metals Acquisition Corp II. According to the US Securities and Exchange Commission (SEC), Morgenthau transferred about $1.2 million of African Gold funds to his personal accounts, and used the embezzled funds to trade crypto assets and meme tokens. At the same time, he traded at a loss and lost almost all of his funds.

To hide the losses, the intruder providedfalsified documents to the accountants and auditor of African Gold, which led to material misstatements in the company's financial statements submitted to the SEC. Morgenthau raised the remaining $4.7 million from private investors, convincing them that the funding would be used to launch another Specialized Acquisition Company (SPAC). In August 2022, African Gold management discovered a shortfall and fired Morgenthau after reporting his malpractice to the SEC.

In January, Morgenthau pleaded guilty to one count.allegations of fraud using electronic means of communication. US District Judge Paul A. Engelmayer recently sentenced the violator to 36 months in prison. The court also ordered law enforcement officers to confiscate $5.1 million from Morgenthau, and the same amount should be paid to them as damages.

"This sentence for Cooper Morgenthau will bea warning that fraud in the SPAC markets is punishable, and the greed of the so-called wolves on Wall Street entails serious consequences,” said U.S. Attorney Damian Williams.

Recall that in March, the US District Court sentenced another violator to three years in prison for defrauding investors of $ 2 million using a fraudulent scheme for mining cryptocurrencies.