The Commodity Futures Trading Commission (CFTC) had filed a motion with the New York Southern District Court that seeks massive penalties against Michael Ackerman, the mastermind of a fraudulent cryptocurrency scheme.
The sign states that the US agency wants the court to order Ackerman to pay $27M in restitution together with a civil penalty of $81M.
The CFTC wants a default judgment issued against Ackerman after he had failed to turn up for the initial motion hearing. The initial motion filing, which the agency filed together with the US Securities and Exchange Commission (SEC), followed allegations that Ackerman had disappeared after raising funds from investors.
According to the report’s summary, Ackerman, a former stockbroker, supposedly raised around $33M from approximately 150 investors. Ackerman successfully convinced the investors that he would invest a symbolic part of their funds in the crypto market. The report added that Ackerman also claimed he would use a “special algorithm that would maximize returns.”
But in the latest motion, the CFTC says that Ackerman didn’t make right on these promises. The new motion says:
“In truth, Ackerman invested no more than $10 million of the $33 million raised from investors in cryptocurrencies and the profits generated by the algorithm were minimal, at best.”
Aside from investing the funds as promised, Ackerman is alleged to have spent the funds to “purchase and renovate a new home, pay more than $600,000 for personal security services, purchase more than $100,000 worth of jewelry at Tiffany & Co., and purchase three cars.”
In the meantime, to make his fraudulent scheme seem legitimate, Ackerman used two entities, Q3 Trading Club and Q3 I LP. The CFTC’s new motion also revealed that Ackerman also resorted to using “doctored screenshots of balances” and falsified information in an attempt to conceal the fraud.
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