US SEC Charges Crypto Scammer with $33 Million

US SEC accused Crypto Scammer Michael Ackerman of violating the anti-fraud provisions of the federal securities laws. He manipulated computer data to show the fake investor returns and the size of the funds’ wallet, indicating that he held as much as $310 million.

12 February, 2020 | AtoZ Markets – The Securities and Exchange Commission (SEC) has charged  Crypto Scammer Michael W. Ackerman with defrauding approximately 150 investors for at least $ 33 million with his digital asset scheme. Fraudsters have claimed that an algorithmic trading strategy designed and deployed by Ackerman can generate extraordinary profits.

SEC Charges Michael Ackerman of Q3 Trading Club

Ackerman’s scam was carried out with two unnamed founding partners, with whom he established the Q3 Trading Club in June 2017. He further established Q3 I LP and an affiliated entity, Q3 Holdings, LCC, both in summer 2018.

In July 2017, Ackerman and his accomplices, one of whom is a surgeon, have sought investors for the Q3 Trading Club via Facebook. They targeted in particular doctors via a private “Physicians Dads Group” on the social media platform. In March 2018, Ackerman was also accused of misleading his founding partners as to the monthly trading profits generated by the fraud scheme.

Eric I. Bustillo, director of the SEC’s regional office in Miami, explained this fraudulent scheme: 

“As we alleged in our complaint, Ackerman attracted investors, including many in the medical profession. He falsely made them believe that he was making extraordinary profits through his algorithmic trading strategy. “

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Crypto Trading Fraud

SEC claims Ackerman falsified screenshots of Q3 trading account to create the false impression that it contained up to $ 310 million in assets. But, in reality, it contains no more than $ 6 million. Besides, he was also charged with using the investors’ fund of $ 7.5 million for personal gain. The agency accuses him of deceiving investors about the success of his cryptocurrency trading on the Q3 trading account. He also promised investors 50% of the account’s profits.

SEC accused him of having enriched himself between March 2018 and December 2019. He used $ 7.5 million of investor funds to buy and renovate a house, buy expensive jewelry, several cars and pay for personal security services. “Ackerman has also exploited popular interest in digital assets as a way to raise millions of dollars for personal use,” added Bustillo.

Moreover, the three partners reportedly pocketed lucrative license fees without disclosing it to investors. Ackerman and its partners reportedly converted only a fraction of investors’ capital into cryptocurrencies. It stored in an offshore digital currency trading platform incorporated in the British Virgin Islands.

The market regulator has filed a complaint about the violation of the anti-fraud provisions of the federal securities laws. For these alleged crimes, the SEC requests a permanent injunction against Ackerman, disgorgement plus pre-trial interest, and a civil penalty.

In addition to the SEC charges, the US Attorney Office of New York and the Commodity Futures Trading Commission also filed similar charges against Ackerman.

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