The former CEO of a shell company that admitted to defrauding investors in connection with special purpose acquisition company (SPAC) transaction has been sentenced to prison by a federal judge in New York.
Earlier this year, Vadim Komissarov, the ex-CEO of Trident Acquisitions Corp., a publicly-traded SPAC, pled guilty to one count of securities fraud for his role in a scheme to defraud Trident investors by engaging in a series of sham transactions to make it appear that a proposed target company, Lottery.com Inc., was engaged in revenue generating activity.
The scheme was designed to win shareholder approval for a proposed acquisition by Trident before it reached a deadline that would have required Trident to return the US$60 million that it raised from investors — which would have cost Komissarov millions of dollars.
In a parallel action, the U.S. Securities and Exchange Commission (SEC) also previously filed charges against executives of the target company, Lottery.com, alongside Komissarov, alleging that they also conspired in the scheme to inflate their company’s revenues and mislead investors.
Without denying the SEC’s allegations, those executives agreed to permanent injunctions against them, and to pay disgorgement and civil penalties that will be determined by the court based on a motion by the SEC.
Now, following his guilty plea, Komissarov has been sentenced to three years in prison, followed by three years of supervised release. He was also ordered to forfeit the US$600,000 he generated by selling the combined company’s stock before the accounting fraud was uncovered.