CFO embezzles money, trades and loses everything

An American finance director got into cryptocurrencies in 2021. To fund his speculative investments, he embezzled millions of dollars belonging to his clients. Bad luck: he lost everything in a few months by betting on dubious cryptos…

A few years ago, Cooper Morgenthau, a 35-year-old chief financial officer, was hired to manage the funds of two SPAC (Special Purpose Acquisition Company) firms. These are publicly traded companies that are solely intended to facilitate the IPO of other companies through a merger. This is a common process in the financial world.

In 2021, the financial expert was drawn to the world of cryptocurrencies. This year, the price of bitcoin skyrocketed, pulling all other projects higher. To realize commercial transactionsMorgenthau decided to dig into the assets of a company under his direction, African Gold Acquisition Corp, which specializes in gold mining.

Also Read: What Does Cryptocurrency Hold for Us After the FTX Disaster of 2023?

Embezzled over $5 million

Between June 2021 and August 2022 he distracted $1.2 million Property owned by the company to fund its commercial operations. Unfortunately, Morgenthau turned out to be a poor trader. Attracted by the lure of profit, he put his customers’ money on the same coins, these cryptocurrencies with no real interest, such as Dogecoin (DOGE) or Shiba Inu (SHIB). The New York prosecutor’s statement actually speaks of a mixture of stocks, even coins and other cryptocurrencies. In most cases, these meme corners are just a joke. It sometimes happens that the price of these cryptocurrencies explodes when the rate increases. Obviously, these rises are always accompanied by a sharp fall.

The sharp fluctuations in the tokens have consumed all misappropriated assets. With his back against the wall, the finance director dived into the fund of another company he ran, Strategic Metals Acquisition Corp, to cover losses. him then embezzled another $4.7 million. These funds were immediately put into trading operations.

While the cryptocurrency market has trended downward since early 2022, funds stolen by Morgenthau have dwindled to a trickle. In the end, the financier lost almost everything. To hide his abuse, he tried everything for everything by falsifying official documents and bank statements. Despite the smoke screens deployed, African Gold became aware of the deception last August. The company immediately terminated its cooperation with the chief financial officer. Shortly thereafter, the American judiciary entered the scene.

electronic fraud

The case remembers the case of Sam Bankman Fried. Like Cooper Morgenthau, the founder of FTX embezzled funds entrusted by his clients to fund trades. Through the platform, users’ assets fell into the hands of Alameda Research, the trading company that made Sam Bankman-Fried’s fortune. As a result of risky investments and poor financial management, a large part of the cryptocurrencies entrusted to them has disappeared.

From this perspective, the FTX affair is no different from the other embezzlement cases that have shaped traditional finance. Unlike the founder of FTX, Morgenthau pleaded guilty to wire fraud. He has acknowledged having broken the trust it owed its public and private investors”. The former financier faces up to 20 years in prison.

Source :

Reuters

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