Former SPAC CFO Facing 3-year Imprisonment for Money Embezzlement

On April 27, the United States Department of Justice (DoJ) issued a press release revealing the court decision on the former chief financial officer of the African Gold Acquisition Corporation (AGAC) Cooper Morgenthau case. The report stated Morgenthau would be placed behind bars for three years for engaging in $5 million money embezzlement.

From June 2021 to August 2022, Morgenthau engaged in unethical business practices involving embezzlement of money. The prosecutor at DoJ noted that Morgenthau accumulated more than $5 million from Strategic purpose acquisition company (SPAC) core businesses, including AGAC and Strategic Metals Acquisition Corporation (SMAC).

Reviewing Morgenthau Money Embezzlement Plot

According to the press release, Morgenthau was accused of rerouting business money to venture into crypto assets, which was futile. It was observed that Morgenthau misused his power to withdraw $1.2 million from the African Gold platform for personal use.

After acquiring a measurable amount of money, Morgenthau invested in buying and selling crypto assets, including meme-themed stocks. Morgenthau’s investment was made at the wrong time when the aggressive bears resurfaced in the crypto market.

As a result, Morgenthau lamented losing all his financial resources from the scheme. The vast losses prompted Morgenthau to forge accounting reports submitted to the African Gold internal auditors.

Furthermore, Morgenthau was accused of deceiving private investors about establishing a new SPAC. The deceptive approach applied by Morgenthau managed to raise  $4.7 million in capital for the fraudulent project.

Morgenthau Facing SEC Charges

Morgenthau, who had vast experience in finance and accounting, leveraged his expertise to ensure the financial reports were well-balanced. It was reported that the $4.7 million was recorded on the African Gold statement to cover for the previous losses he made on crypto.

Morgenthau’s fake SPAC coincided with SMAC action to engage private investors to raise money to support the initial public offering (IPO) launch.

In August 2022, the African Gold auditors identified accounting errors in the Morgenthau financial report. After engaging Morgenthau, the African Gold team failed to reach a concrete solution.

Based on the Morgenthau employment contract, it was observed that his conduct was against the African Gold core values and statutory requirements. After further consultation concerning Morgenthau, the African Gold agreed to dismiss him from work.

Also, African Gold reported the matter to the U.S. Securities and Exchange Commission for further legal action. On January 3, Morgenthau appeared before a court in Florida, where he pleaded guilty for engaging in wire fraud.

In the light of Morgenthau court proceedings, the prosecutors ordered the ex-CFO to be sentenced to 3 years. Morgenthau was instructed to settle forfeit and restitute penalties of $10.2 million.

Reflecting on the April 27 court decision, U.S. Attorney General Damian Williams confirmed to the SPAC community that Morgenthau’s misconduct was punishable. He reiterated that the regulators will take legal action for any fraudulent activity.

The post Former SPAC CFO Facing 3-year Imprisonment for Money Embezzlement first appeared on CryptocyNews.com.

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