The leader of a cryptocurrency program that has swindled over $ 30 million from investors has pleaded guilty to fraud, the US Department of Justice (DOJ) said. He is now facing a maximum sentence of 20 years in prison.
$ 30 million crypto program leader pleads guilty of fraud
The US Department of Justice (DOJ) announced on Wednesday that Michael Ackerman pleaded guilty to wire fraud. The Justice Department described that Ackerman is the leader of a “fake cryptocurrency investment scheme”. He “orchestrated a multimillion-dollar cryptocurrency investment system” and “admitted to causing more than $ 30 million in casualty losses.” The DOJ stated:
Ackerman, 52, of Sheffield Lake, Ohio, pleaded guilty today to wire fraud that carries a maximum penalty of 20 years in prison.
According to court records, Ackerman and others set up an alleged cryptocurrency mutual fund in or around 2017 and recruited hundreds of investors. “The fund was an investment club that allowed its members to contribute US dollars, which investors were told that they would then be used to invest and trade in Bitcoin and other cryptocurrencies,” the DOJ noted.
Ackerman was the fund’s chief trading officer; he personally controlled the fund’s primary trading account on a cryptocurrency exchange. He claimed that the fund’s proprietary trading algorithm is generating about 15% profit for investors every month.
By December 2019, he claimed that the fund’s investment pool, which consisted of approximately $ 37 million in original investor contributions, had grown to approximately $ 315 million. “In reality, however, the primary trading account used by Ackerman had an account balance that never exceeded approximately $ 5 million,” the DOJ said.
Additionally, the Justice Department stated, “Instead of investing and trading on behalf of the Fund, Ackerman stole at least $ 9 million in investor contributions and used them to fund a lavish lifestyle that included buying multiple properties, hundreds of thousands of dollars Tiffany jewelry, vehicles, travel and personal security services. ”The DOJ concluded:
Under the terms of his plea, Ackerman agreed to a refund of at least $ 30,667,738.79. Ackerman also agreed to withhold $ 36,268,515, including the millions of dollars in cash, real estate, and jewelry fraudulently obtained from victims or purchased with sacrificial funds.
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