Fraudster Pleads Guilty to $35M Crypto Investment Scheme

cryptocurrencies and money on table

Never forget the old adage: if it sounds too good to be true, it probably is.

Michael Ackerman, a former trading floor broker at the New York Stock Exchange, recently pleaded guilty for running an investment scheme that lost over $35 million for investors.


According to the DOJ and SEC, Ackerman conned more than 150 investors into believing that he had proprietary algorithms and software that achieved 15% monthly returns in the crypto markets. Ackerman and his co-conspirators created a “trading club” where investors could participate and achieve consistent returns with little to no time or effort.

To make matters worse, Ackerman told investors that his trading methods and algorithms allowed him to grow $30 million into $315 million over a short period of time. This quickly grabbed investors’ attention and allowed Ackerman to take advantage of his victims.

However, authorities discovered that Ackerman never held more than $5 million in his main brokerage account. Thus, Ackerman and his co-conspirators severely misrepresented their investors.

Ackerman has pleaded guilty and awaits sentencing. He has also been ordered to pay more than $30 million in restitution to investors.

Bitcoin Buzz

Unsurprisingly, Ackerman used Bitcoin as the main source of trading profits, which always creates buzz around these schemes. Since we have seen monumental gains in Bitcoin over the past decade, it becomes believable that some people could grow their modest investments into enormous stockpiles of cash.

Unfortunately,it is not that simple.

In many cases, people who claim to have “proprietary trading software” have been caught lying to investors. Fraudsters can easily claim that they have access to this technology because many investors believe this is how money is made in the markets.

However, there is much more failure than success in this area. Day trading is a time-consuming activity that requires skill, not luck, software, or algorithms. People have been led to believe that they could automate their moneymaking strategies by trading stocks, cryptocurrency, foreign exchange, and other similar areas.

This is rarely the case, and it is dangerous to jump into such schemes without proper due diligence and investigations. We caution investors to be extremely wary of such claims, since it is easy for fraudsters to disappear after taking your money.

Remember, whatever it is, let’s make sure our money is working for us rather than somebody else.

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