Former SPAC CFO sentenced to three years in prison for embezzling $5 million

Cooper Morgenthau, the former CFO of African Gold Acquisition Corp. (AGAC), has been sentenced to three years in prison for embezzling over $5 million from three special purpose acquisition companies (SPACs) between June 2021 and August 2022. Morgenthau wired $1.2 million from African Gold to his personal accounts to trade equities and options of cryptocurrencies and meme stocks, resulting in significant losses. He then provided falsified documents to accountants and auditors at African Gold ahead of its public filing with the SEC, which led to material misstatements in the company's financial records. Morgenthau also raised $4.7 million from private investors in a separate SPAC, claiming it would be used to launch another SPAC, but instead used the funds to cover his losses and continue trading.

African Gold discovered the withdrawals in August 2022, fired Morgenthau, and informed the SEC of his malpractice. Morgenthau pled guilty to one count of wire fraud on January 3rd and was sentenced to three years in prison. He was also ordered to forfeit $5.1 million and pay further restitution of $5.1 million.

U.S. Attorney Damian Williams stated that the sentencing of Morgenthau sends a message that fraud in the SPAC markets will be punished, and greed on Wall Street will be met with serious consequences. This case serves as a reminder of the importance of transparency and honesty in financial dealings, especially in the cryptocurrency and SPAC markets where the potential for fraud and malpractice is high.