Leader Of Fake Cryptocurrency Investment Scheme Charged With Fraud And Money Laundering

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Michael F. McPherson, Special Agent-in-Charge of the Tampa Division of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment charging MICHAEL ACKERMAN with wire fraud and money laundering.  ACKERMAN allegedly defrauded over 100 individuals of more than $35 million through his fake cryptocurrency investment scheme.  ACKERMAN will be presented Friday in federal court in the Northern District of Ohio.

U.S. Attorney Geoffrey S. Berman said:  “Allegedly touting monthly returns of over 15%, Michael Ackerman was able to raise over $35 million in investments for his fake cryptocurrency scheme.  He allegedly falsified documents representing to investors that his fund had a balance of over $315 million worth of cryptocurrencies, when in actuality, he had less than half a million dollars.  Today’s arrest should remind would-be investors to take extreme caution and thoroughly vet investment opportunities, especially when promised abnormally high rates of return.”

HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “Ackerman is alleged to have defrauded more than 100 investors through a cryptocurrency fraud scheme, doctoring data for appearances to make his investment fund look successful.  As a result of this scheme, his victims are left feeling cheated after being swindled out of over $35M collectively.  HSI will continue to investigate a plethora of financial fraud cases to ensure that individuals like Ackerman know they will face the consequences for any scheme that victimizes the innocent.”

FBI Special Agent-in-Charge Michael F. McPherson:  “This was a classic fraud scheme with a digital twist, using cryptocurrency to take advantage of unsuspecting investors. 

The FBI and its partners are committed to protecting investors from scams no matter how the fraudsters try and disguise the scheme.”      

According to the allegations in the Complaint and Indictment, both unsealed today^[1]:

In or about 2017, MICHAEL ACKERMAN and others started a purported cryptocurrency “investment” fund (the “Fund”) and recruited hundreds of individual investors into the Fund.  Under the terms of the Fund, investors were told that they would receive 50% of their trading profits, and that the founders of the Fund, including ACKERMAN, would receive the other 50%.  ACKERMAN falsely represented to potential investors that the fund had historical returns of approximately 15% each month.  Moreover, during the period alleged in the Complaint and Indictment, ACKERMAN prepared materials falsely purporting to show that the Fund was returning approximately 15% each month, and shared that information with Fund investors.  For example, in or about December 2019, ACKERMAN represented to investors and others that the Fund had a balance of over $315 million worth of cryptocurrencies available for trading in a Fund account.  Those representations by ACKERMAN included screenshots of trading data doctored by ACKERMAN in order to make it appear that the Fund was operating at that successful level, when its actual trading balance was less than the equivalent of half a million dollars.  ACKERMAN, moreover, regularly stole proceeds of this fraud from the Fund, and attempted to conceal those proceeds not only through his false representations to investors, but through the purchase of at least five pieces of real estate, all of which were titled to third parties.

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ACKERMAN, 50, of Sheffield Lake, Ohio, is charged with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force and the Federal Bureau of Investigation in Tampa, and thanked the attorneys and investigators at the Commodity Futures Trading Commission and the Securities and Exchange Commission, whose expertise and diligence were integral to the development of this investigation. 

The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Kiersten Fletcher, Jessica Greenwood, and Sheb Swett are in charge of the prosecution.

The charges contained in the Complaint and Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.