The U.S. Securities and Exchange Commission has filed fraud charges against a CFO who embezzled funds to invest in crypto, according to a Jan. 3 press release.

The accused — Cooper J. Morgenthau — served as CFO of African Gold Acquisition Corp., which acted as a special purpose acquisition (SPAC) company that arranged mergers and acquisitions between other companies.

Morgenthau’s entire scheme involved the theft of more than $5 million between June 2021 and July 2022. He initially embezzled $1.2 million of funds directly from African Gold, then spent the stolen funds on personal expenses. He also used the funds to trade crypto assets and securities including “meme stocks.”

Morgenthau then attempted to cover his losses by raising $4.7 million through two SPAC series called Strategic Metals Acquisition Corp. I and II. However, he soon invested the money raised in that process in cryptocurrency once again.

Morgenthau’s poor investments and unrestrained spending led him to lose all of the stolen funds by August 2022, according to earlier legal filings.

The SEC asserts that Morgenthau specifically violated antifraud provisions of federal securities laws. He lied to auditors and accountants, falsified records at African Gold, and filed false certifications with the SEC. He will be barred from serving in certain executive positions and faces financial penalties which are still pending.

The U.S. Attorney’s Office for the Southern District of New York has also announced parallel charges against Morgenthau.

The SEC has carried out several other cases related to crypto over the past year. In February 2022, it settled with BlockFi over an unregistered product. In October, it settled with Kim Kardashian over her endorsement of an ICO.

In December 2022, the SEC charged FTX associates Caroline Ellison and Gary Wang with fraud in parallel charges with the Southern District of New York.

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