Leader Of Fake Cryptocurrency Investment Scheme Pleads Guilty To Fraud

by 24USATVSept. 8, 2021, 6 p.m. 23
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Audrey Strauss, the United States Attorney for the Southern District of New York, announced that MICHAEL ACKERMAN, who orchestrated a multimillion-dollar cryptocurrency investment scheme, pled guilty to wire fraud today before United States Chief District Judge Laura Taylor Swain. ACKERMAN admitted to causing victim losses of more than $30 million.

U.S. Attorney Audrey Strauss said: “As he admitted today, Michael Ackerman raised millions of dollars in investments for his fake cryptocurrency scheme by falsely touting monthly returns of over 15 percent, falsifying documents to con investors into thinking his fund had a balance of over $315 million, and spending millions in investor funds on himself. Now Ackerman awaits sentencing for his crime.”

According to the Indictment and the underlying complaint filed in this case, as well as prior court filings and recent court proceedings:

In or about 2017, MICHAEL ACKERMAN and others started a purported cryptocurrency “investment” fund (the “Fund”) and recruited hundreds of individual investors into the Fund. The Fund was an investment club that allowed its members to contribute U.S. dollars, which the investors were told would then be used to invest and trade in Bitcoin and other cryptocurrencies. ACKERMAN was held out as the Fund’s chief trading officer and personally controlled the Fund’s primary trading account on an online cryptocurrency exchange. Based on figures provided by ACKERMAN, the Fund claimed that its proprietary trading algorithm was earning approximately 15 percent in profit for investors each month.

By December 2019, ACKERMAN claimed that the Fund investment pool – which consisted of approximately $37 million in original investor contributions – had grown in value to approximately $315 million. ACKERMAN’s claims about the performance of the Fund were communicated to existing Fund investors as well as prospective investors, some of whom were induced to invest in the Fund in the hopes of enjoying high rates of return.

The rates of return that ACKERMAN reported on the Fund investments, and its overall Fund balance, were false. In reality, the primary trading account used by ACKERMAN had an account balance that never exceeded approximately $5 million. To support his false claim that the Fund’s investments were earning 15 percent in monthly profits and had grown to approximately $315 million, ACKERMAN doctored numerous account screenshots that he knew were being used to communicate with Fund investors.

Instead of investing and trading on behalf of the Fund, ACKERMAN stole at least $9 million in investor contributions and used them to bankroll a lavish lifestyle that included his purchase of multiple pieces of real estate, hundreds of thousands of dollars of Tiffany jewelry, vehicles, travel, and personal security services.

ACKERMAN, 52, of Sheffield Lake, Ohio, pled guilty today to one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Under the terms of his plea, ACKERMAN agreed to make restitution of at least $30,667,738.79. ACKERMAN also agreed to forfeiture of $36,268,515, including the millions of dollars in cash, real estate, and jewelry that were fraudulently obtained from victims or bought with victim funds.

ACKERMAN is scheduled to be sentenced by Judge Swain on January 5, 2022, at 2:00 p.m.

Ms. Strauss praised the outstanding work of special agents from Homeland Security Investigations’ El Dorado Task Force and the Federal Bureau of Investigation in Tampa, and thanked the attorneys and investigators at the Commodity Futures Trading Commission and the Securities and Exchange Commission whose expertise and diligence were integral to the development of this investigation and today’s guilty plea.

The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Jessica Greenwood, Sheb Swett, and Kiersten Fletcher are in charge of the prosecution.

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