July 2, 2022
  • July 2, 2022

Leader of cryptocurrency scam targeting doctors pleads guilty

By on September 16, 2021 0


The co-founder of two alleged cryptocurrency investment funds pleaded guilty to wire fraud as part of a scam and admitted to losing more than $ 30 million to his victims.

According to an unsealed indictment and a complaint from the United States Securities and Exchange Commission (SEC), both filed in the Southern District of New York, Michael Ackerman and two partners formed Q3 Trading Club and Q3 I in 2017, claiming to have created a proprietary trading algorithm. which has benefited from the volatility of cryptocurrencies while minimizing risk.

The scam targeted the doctors using the connections of one of Ackerman’s partners, who was a surgeon. The funds were investment clubs that allowed members to contribute money that they had been told would be used to invest and trade Bitcoin and other cryptocurrencies. As the fund’s operations manager, Ackerman personally controlled the primary trading account on an online cryptocurrency exchange.

Based on figures provided by Ackerman, who previously worked as a UBS stockbroker, the fund claimed that its proprietary trading algorithm made around 15% in monthly profits. And by the end of 2019, Ackerman claimed that the fund’s investment pool, which had raised around $ 37 million in initial contributions from investors, had climbed in value to around $ 315 million. However, the rates of return Ackerman reported were bogus, and the primary trading account he used never had an account balance greater than $ 5 million, according to court documents.

Ackerman also reportedly did not invest more than $ 10 million of the $ 33 million raised from cryptocurrency investors and “the profits generated by the algorithm were minimal at best,” the SEC said in its complaint. . The regulator said that in order to hide this fact from investors, Ackerman prepared fake financial records by falsifying screenshots of trading account balances and prepared monthly investor newsletters or did so. so that investors receive false information about the accounts.

Ackerman is said to have stolen at least $ 9 million in investor contributions and used the money to pay for real estate, Tiffany jewelry, cars, travel, and personal security services.

As he admitted today, Michael Ackerman has raised millions of dollars in investment for his bogus cryptocurrency program by falsely touting monthly returns of over 15%, forging documents to mislead investors by making them believe his fund had a balance of over $ 315 million and spending millions in investor funds on himself, ”US lawyer Audrey Strauss said in a statement.

Under his plea deal, Ackerman agreed to return nearly $ 31 million and confiscate over $ 36 million, including the millions of dollars in cash, real estate, and jewelry fraudulently obtained from victims or purchased with the victim. funds. Ackerman, 52, will be sentenced in January and faces a maximum sentence of 20 years in prison for the wire fraud count.

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Tags: Audrey Strauss, bitcoin, Cryptocurrency, investment plan, Michael Ackerman, Q3 Trading Club, Southern District of New York, electronic fraud