With the prolonged crypto bear market ongoing, one will think most people should be losing money. While that is true, another thing also true is the increase in crimes in the bear market. On today’s news, an ex-chief financial officer of two special purpose acquisition companies (SPACs) has pleaded guilty in court to embezzling more than $5 million to trade meme stocks and cryptocurrencies.

Going by the name Cooper Morgenthau, the former chief financial officer on Tuesday pleaded guilty to wire fraud charges in front of the U.S. District Judge Paul Engelmayer in Manhattan federal court.

Ex-CFO Committed Crimes and Sentence

According to Authorities, Morgenthau had embezzled over $1.2 million between June 2021 and August 2022 from African Gold Acquisition Corp, a blank check company, and underhanded the crime by forging its account statements, and spent or lost all of it in crypto and meme stock trading.

Subsequent to that, the SEC said Morgenthau raised a total of $4.7 million from investors in SPACs, aliased as Strategic Metals Acquisition Corp, to cover his losses but lost most of the funds in trading crypto. At his scheduled April 25 sentencing, Morgenthau is said to face a likely jail sentence of about 6-7 years under recommended federal guidelines.

EX-CFO Settled For An Agreement 

Morgenthau settled for an agreement to forfeit $5.11 million and pay an equal amount in restitution, as well as settle related civil charges by the U.S. Securities and Exchange Commission. His Background in the African Gold company seems as though the illegal embezzlement of funds has been a recurring activity from Morgenthau.

African Gold, which was established to buy a gold mining business and based in New York, had raised $414 million in a February 2021 initial public offering. The SEC said the company eventually laid off Morgenthau last year in August after discovering his run away with funds and vendors declining to work for the company. 

According to African Gold, it terminated Morgenthau at the time after knowing about his “improper withdrawals” endeavor to conceal them. U.S. Attorney Damian Williams in Manhattan noted in a statement that given the pleading guilty, Morgenthau “acknowledged encroaching the trust that he owed to his public and private investors.”

Meanwhile, the crypto market still seems to be in a confused state with the little pump happening in Bitcoin and other altcoins. So far, Bitcoin has increased by 1.12% in the last 24 hours, gaining over $100 in price.

As shown in the chart above, chances are we could see a retrace soon to take out the liquidity in the vector candle. As for other altcoins, they all also seem to be following the same path as Bitcoin. At the time of writing, Ethereum is up 3% with a trading price of $1,251.

Featured image from iStock, charts from TradingView.com