Sheffield Lake man pleads guilty in $30 million cryptocurrency scam

A Sheffield Lake man whom federal prosecutors said created "a multimillion-dollar cryptocurrency investment scheme" that defrauded investors out of more than $30 million starting in 2017 pleaded guilty to wire fraud in federal court in New York on Wednesday. Michael Ackerman, 52, entered the plea to one count of wire fraud before U.S. Chief District Judge Laura Taylor Swain in U.S. District Court for the Southern District of New York. U.S. Attorney Audrey Strauss said Ackerman admitted defrauding his victims out of $30 million. Ackerman is scheduled to be sentenced by Swain at 2 p.m. Jan. 5, 2022. Under federal sentencing guidelines, Ackerman faces a maximum sentence of 20 years in prison, though his total prison term will be determined by the judge, federal prosecutors said. The terms of Ackerman's plea require him to make restitution of at least $30,667,739. He also agreed to forfeit $36,268,515, including millions of dollars in cash, real estate and jewelry "fraudulently obtained from victims or bought with victim funds," according to the U.S. Attorney's Office. Ackerman "raised millions of dollars in investments for his fake cryptocurrency scheme by falsely touting monthly returns of over 15 percent, falsifying documents to con investors into thinking his fund had a balance of over $315 million, and spending millions in investor funds on himself," Strauss said. "Now Ackerman awaits sentencing for his crime." Federal prosecutors said that starting in 2017, Ackerman and others started a cryptocurrency "investment" fund called Q3 and recruited hundreds of individual investors into an investment club that allowed its members to contribute U.S. dollars, which the investors were told would then be used to invest and trade in Bitcoin and other cryptocurrencies. Ackerman was the fund's "chief trading officer" and personally controlled its primary trading account on an online cryptocurrency exchange. He claimed its proprietary trading algorithm was earning approximately 15 percent in profit for investors each month, according to the U.S. Attorney's Office. By December 2019, Ackerman claimed that the fund's investment pool, which contained approximately $37 million in original investor contributions, had grown in value to approximately $315 million — information he shared with investors and prospective investors. The rates of return claimed by Ackerman were false, and the fund's overall balance never exceeded $5 million, according to federal prosecutors. To keep up the fraud, he "doctored numerous account screenshots that he knew were being used to communicate with fund investors," prosecutors said. "Instead of investing and trading on behalf of the fund, Ackerman stole at least $9 million in investor contributions and used them to bankroll a lavish lifestyle that included his purchase of multiple pieces of real estate, hundreds of thousands of dollars of Tiffany jewelry, vehicles, travel, and personal security services," Strauss' office said. Ackerman was indicted by a federal grand jury in February 2020. CoinDesk.com reported in August 2020 that Ackerman spent 16 years as an institutional broker on the New York Stock Exchange. Agents of Homeland Security Investigations' El Dorado Task Force, the FBI's Tampa, Florida, office, attorneys and investigators at the Commodity Futures Trading Commission and the Securities and Exchange Commission "were integral to the development of this investigation and today's guilty plea," Strauss said.