Crypto scammer Michael Ackerman pleads guilty to $37 million scam
An Ohio resident charged with running a cryptocurrency fraud that raked in more than $37 million pled guilty to wire fraud in a US federal court on Wednesday.
The Securities and Exchange Commission (SEC) accused Michael Ackerman, a former New York Stock Exchange floor broker, of engaging in a bogus cryptocurrency trading desk. The scheme defrauded over 150 investors into believing that Ackerman has developed a proprietary algorithm that earn big on trading Bitcoin and other cryptocurrencies.
Along with two other associates, the fraudsters claimed that their funds – Q3 Trading Club and Q3 I LP – had grown to hold as much as $315 million when in reality it had just half a million left. Investors were solicited to buy phony investment plans supposedly for trading crypto, promising returns of up to 20% a month.
In fact, no such algorithms existed, and payouts occurred as returns on any real investments are nowhere near these rates. Instead of investing the funds as promised, the primary trading account used by Ackerman and his cohorts had a balance that never exceeded $5 million.
The documents submitted to the court paint a fairly concise picture of a get-rich-quick scheme, outlining his interaction and contact with less experienced victims.
Ackerman, 52, spent most of his victims’ monies to pay for his personal expenses, including expensive real estates, jewelry purchases, vehicles, travel, and security services.
He pleaded guilty to wire fraud which carries a sentence of up to 20 years in prison and could be also fined $250,000. Michael Ackerman is scheduled to be sentenced by Judge Swain on January 5, 2022.
In a press release, 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.”
The justice department’s statement also contained a detailed description of disgorgement and civil penalties that Ackerman agreed to pay. It says that under the terms of his plea, he will pay a restitution of more than $30 million and agreed to forfeit $36 million in cash, real estate, and jewelry that were purchased with the victim funds.