Another crook who thought he was above the law is finding out how wrong he was. Michael Ackerman, along with two associates, led a scheme that managed to secure $33 million from investors who were tricked into believing that an innovative algorithm would help them earn big on the cryptocurrency trading market. The only problem is that the solution allegedly never existed. The truth will now come out in the open, as the US Securities and Exchange Commission (SEC) is on the attack and has charged Ackerman for the fraudulent scheme.
According to a press release from the SEC, the Ohio-based Ackerman and his cohorts managed to convince 150 physicians that they had the ultimate winning solution to see huge returns from crypto trading. By investing in the trio’s funds, Q3 Trading Club and Q3 I LP, the doctors could take advantage of Ackerman’s algorithm in order to generate “extraordinary profits” from their investments. The financial regulator asserts in its complaint against Ackerman that the would-be entrepreneur fabricated the whole story.
To lend credibility to the scheme, Ackerman made up details surrounding his trading performance, the use of the funds he was given and the safety of the two funds. He also manipulated computer data to show fake returns and the size of the funds’ portfolios, indicating that they held as much as $310 million.
In reality, the trading account held just $6 million, and $7.5 million of the investor funds went directly to Ackerman’s back pocket. That money was used on house renovations, jewelry purchases, vehicles, personal security and much more.
In its press release, the SEC adds, “The SEC’s complaint, filed in federal court in New York, charges Ackerman with violations of the antifraud provisions of the federal securities laws. The SEC seeks a permanent injunction, disgorgement plus pre-judgment interest, and a civil penalty. In parallel actions, the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission announced charges against Ackerman arising from similar conduct.”
It was only a matter of time before the scam was uncovered – Ackerman apparently didn’t learn from the results of scams led by Bernie Madoff and others. Since his get-rich-quick scheme didn’t work out so well, he can now contemplate his next move behind pars. The SEC is seeking a ban that would prevent Ackerman from participating in any financial capacity, as well as civil fines and disgorgement. In addition, he is going to be charged with money laundering and wire fraud, each of which carries a sentence of up to 20 years.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.