By Jonathan Stamp
NEW YORK (Reuters) – A former chief financial officer of several special purpose acquisition companies (SPACs) has pleaded guilty to embezzling more than $5 million from them and nearly all of it by trading meme stocks and cryptocurrencies to have lost.
Cooper Morgenthau, 35, of Fernandina Beach, Fla., pleaded guilty to a wire fraud count Tuesday before US District Judge Paul Engelmayer in federal court in Manhattan.
Morgenthau faces a possible sentence of approximately six to 7 1/4 years at his scheduled April 25 sentencing, under recommended federal guidelines.
He also agreed to forfeit $5.11 million and pay an equal amount in restitution and settled related civil claims brought by the US Securities and Exchange Commission.
Michael Bowen, an attorney for Morgenthau, declined to comment.
Authorities said Morgenthau received more than $1.2 million from African Gold Acquisition Corp between June 2021 and August 2022. stole, concealed the theft by falsifying his bank statements and spent or lost everything in securities trading.
To cover his losses, Morgenthau then raised $4.7 million from investors in SPACs known as Strategic Metals Acquisition Corp, only to lose most of it on crypto trading, the SEC said.
African Gold, which is based in New York and was formed to buy a gold mining company, had raised $414 million in an IPO in February 2021.
Morgenthau was fired last August after he ran out of money and salespeople refused to work for the company, the SEC said.
African Gold said at the time it terminated Morgenthau after learning about its “inappropriate withdrawals” and attempts to hide them.
In his guilty plea, Morgenthau “admitted to betraying the trust that it owed its investors, public and private,” US Attorney Damian Williams said in a statement in Manhattan.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)
Source: Crypto News Deutsch