CFTC Seeks $100 Million From Alleged Crypto Fraudster – Decrypt

In brief

  • Last year, Michael Ackerman was indicted for his alleged involvement in a fraudulent cryptocurrency scheme.
  • The SEC and CFTC are saying he raised over $33 million, and made off with much of the money.
  • Now, the CFTC has asked the judge for a fine of over $100 million.

The CFTC is seeking over $100 million from Michael Ackerman, a former stock broker, for his alleged involvement in a fraudulent cryptocurrency scheme.

The new motion, filed yesterday with the New York Southern District Court, asks the judge for $27 million as restitution, and $81 million as a civil monetary penalty.

The regulator has asked for this to be a judgment by default, since Ackerman has apparently failed to show up to court since the complaints were initially filed.

Ackerman was responsible for two financial entities—the Q3 Trading Club, and Q3 I, LP—which the CFTC says raised around $33 million from over 150 investors, most of whom were doctors. Ackerman allegedly claimed that he’d put much of that money into the crypto market, with a special algorithm that would maximize returns.

“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,” reads a summary in the new motion.

The CFTC is saying that Ackerman doctored screenshots of balances, and otherwise falsified information about where investors’ money was actually going. He’s accused of using those 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.”

As for the supposed algorithm, the CFTC says the profits it generated were “minimal, at best.”

Both the SEC and CFTC initially filed complaints against Ackerman last February, neither of which have been fully resolved. The Department of Justice also indicted Ackerman on counts of wire fraud and money laundering.

An entity called the Q3 Investment Recovery Fund, created on behalf of the investors who lost money in the alleged scheme, has also come out against Ackerman, along with two others who it claims were involved: James Seijas, formerly of Wells Fargo, and Quan Tran, a Florida surgeon. Seijas and Tran are not currently facing charges.

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