The former CFO of African Gold Acquisition Corp Cooper Morgenthau was sentenced to three years in prison for embezzling funds used to trade cryptocurrencies.
Cooper Morgenthau embezzled more than $5 million from African Gold Acquisition Corp, Strategic Metals Acquisition Corp I and Strategic Metals Acquisition Corp II between June 2021 and August 2022, according to a U.S. Department of Justice press release.
According to the SEC, Morgenthau transferred about $1.2 million of African Gold funds to his personal accounts, and used the embezzled funds to trade cryptoassets and meme tokens.
In doing so, he traded at a loss and lost almost all of his funds.
To hide the losses, the violator provided African Gold’s accountants and auditor with 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 specialty acquisition company (SPAC).
In August 2022, African Gold management discovered the shortfall and fired Morgenthau, reporting him to the SEC for malpractice.
In January, Morgenthau pleaded guilty to one count of wire fraud. Recently, U.S. District Judge Paul A.. Engelmeyer (Paul A.. Engelmayer) sentenced the offender to 36 months in prison.
The court also ordered law enforcement to seize $5.1 million from Morgenthau, and the same amount should be paid to them as restitution.
“This conviction for Cooper Morgenthau will be a warning that fraud in the SPAC markets is punishable and the greed of the so-called wolves on Wall Street carries serious consequences,” said U.S. Attorney Damian Williams.
Recall that in March, the U.S. District Court sentenced another offender to three years in prison for defrauding investors of $2 million using a fraudulent scheme to mine cryptocurrencies.