SPAC CFO Sentenced to Prison for Embezzling $5M - Blockchain.News
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SPAC CFO Sentenced to Prison for Embezzling $5M

Cooper Morgenthau, former CFO of African Gold Acquisition Corporation, was sentenced to three years in prison for embezzling $5 million from three different SPACs. Morgenthau used the embezzled funds to trade cryptocurrencies and meme stocks, losing almost all of the money. He then provided falsified documents to the company’s accountants and raised $4.7 million from private investors based on fraudulent claims. Morgenthau has been ordered to forfeit $5.1 million and pay restitution of the same amount.


  • Apr 29, 2023 11:00
SPAC CFO Sentenced to Prison for Embezzling $5M

Cooper Morgenthau, the former CFO of African Gold Acquisition Corporation (AGAC), has been sentenced to three years in prison for embezzling $5 million from three different Special Purpose Acquisition Companies (SPACs). The sentencing comes as a result of Morgenthau’s use of the embezzled funds to trade cryptocurrencies and meme stocks, leading to significant losses. In addition to his prison sentence, Morgenthau has been ordered to forfeit $5.1 million and pay restitution of the same amount.

The embezzlement scheme began in June 2021 and continued until August 2022, during which time Morgenthau wired approximately $1.2 million from African Gold to his personal accounts for trading purposes. He traded equities and options of cryptocurrencies and meme stocks, leading to almost all of the funds being lost. Following the losses, he then provided falsified documents to accountants and an auditor at African Gold ahead of its public filing with the U.S. Securities and Exchange Commission (SEC). This led to “material misstatements” in the company’s public financial records.

Moreover, Morgenthau raised an additional $4.7 million from private investors in a separate SPAC, based on the fraudulent claim that the money would be used to launch yet another SPAC. Unfortunately for the investors, Morgenthau used the freshly-raised capital to cover his losses at African Gold and continue further trading of cryptocurrencies and meme stocks.

The malpractice was discovered by African Gold in August 2022, resulting in Morgenthau being fired, and the SEC being informed. Subsequently, Morgenthau pled guilty to one count of wire fraud on January 3.

The case sends a clear message to the SPAC community that fraud in the markets will not be tolerated. U.S. Attorney Damian Williams said in a statement, “With today’s sentencing of Cooper Morgenthau, SPAC promoters have been sent a message that fraud in the SPAC markets will be punished, and greed on Wall Street will be met with serious consequences.”

SPACs have become increasingly popular over recent years, and this case highlights the importance of proper oversight and compliance in the sector. While SPACs offer companies a faster and less complicated path to going public, they also come with risks. Embezzlement and fraud can damage the reputation of the entire industry, leading to regulatory scrutiny and increased oversight. As such, it is essential for SPACs and their investors to take proper precautions and perform proper due diligence when selecting management teams and making investment decisions.

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