Release Number 8732-23
Federal Court Orders Ohio Man to Pay Over $50 Million for Fraudulent Digital Asset Trading Scheme
June 28, 2023
Washington, D.C. — The Commodity Futures Trading Commission today announced that on June 13, Judge Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York issued a default judgment granting a permanent injunction against Michael Ackerman of Alliance, Ohio. The order bans Ackerman from trading in any CFTC-regulated markets and registering with the CFTC. It also requires him to pay $27 million in restitution to defrauded victims and a $27 million civil monetary penalty in connection with a fraudulent digital asset trading scheme.
The order stems from a CFTC complaint filed on February 11, 2020. The complaint alleged that from August 2017 through December 2019, Ackerman operated a fraudulent scheme that solicited and misappropriated funds to purportedly trade digital commodity assets. The complaint further alleged that based on Ackerman’s fraudulent misrepresentations, more than 150 individuals and entities deposited at least $33 million with him. However, less than $10 million was used to trade digital commodity assets and the remaining funds were misappropriated for personal use or to prolong the fraudulent trading scheme.
The complaint also alleged that to entice potential customers to invest in his scheme, Ackerman knowingly and falsely represented that he was profitably trading digital commodity assets and earning monthly returns of approximately 15%. However, Ackerman was not a successful trader, and to conceal the fraud he provided customers with false accounting statements, newsletters containing false trading returns, and fictitious screenshots of the amount of money under management.
Parallel Criminal Action
On February 15, 2022, Ackerman was sentenced, in a related criminal case in the U.S. District Court for the Southern District of New York, to five years of probation with a year of home confinement. On August 22, 2022, Ackerman was ordered to pay $31 million in restitution. [See United States v. Ackerman, No. 1:20-cr-00093]
The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Securities Exchange Commission in this matter.
The Division of Enforcement staff responsible for this case are Dmitriy Vilenskiy, Jason Gizzarelli, Jonah E. McCarthy, Paul G. Hayeck, and former staff member Luke B. Marsh.