July 22, 2024

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 CFOGold mining company African Gold Acquisition Corp Cooper Morgenthau was sentenced to three years in prison for embezzling funds used to trade cryptocurrencies.

According to a press release from the Ministry of JusticeUSA, between June 2021 and August 2022, Cooper Morgenthau embezzled more than $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 approximately $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 his funds.

To hide the losses, the offender providedAfrican Gold's accountants and auditor falsified documents, resulting in material misstatements in the company's financial statements filed with the SEC. Morgenthau raised the remaining $4.7 million from private investors, convincing them that the funding would be used to launch another special purpose acquisition company (SPAC). In August 2022, African Gold management discovered the shortfall and fired Morgenthau, reporting him to the SEC for abuse of power.

In January, Morgenthau pleaded guilty to onecount of wire fraud. Recently, US District Judge Paul A. Engelmayer sentenced the offender to 36 months in prison. The court also ordered law enforcement to confiscate $5.1 million from Morgenthau, and the same amount must be paid to them as damages.

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

Let us 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.