Trump-SPAC Insider Trading Sends Second Brother to Prison

A scheme to make millions of dollars on a deal to take Donald Trump’s social media startup public ended badly for a pair of Florida brothers, with both sentenced to prison for insider trading.
Michael Shvartsman, 53, was ordered on Thursday to spend 28 months behind bars by US District Judge Lewis Liman, a day after the judge gave his younger brother Gerald 22 months for his role in the conspiracy. 
The brothers were charged by federal prosecutors in Manhattan in June 2023 with making more than $22 million through their trading in a blank check company, Digital World Acquisition Corp., along with another Florida man, Bruce Garelick. The Shvartsmans pleaded guilty to securities fraud in April, while Garelick was convicted in a jury trial in May and is set to be sentenced next month.
The US had asked Liman to impose a punishment in line with federal sentencing guidelines, which called for Michael Shvartsman to spend 46 to 57 months behind bars, saying his conduct was “flagrant, manipulative and motivated by sheer greed.” 
Prosecutors said he was entrusted with confidential information about the merger through a special purpose acquisition company, or a SPAC. They say he arranged for Garelick, an employee of one of his businesses, to serve on the SPAC’s board and made about $18 million trading on the information personally. He is the founder of Rocket One Capital LLC, a Miami-based venture capital firm where Garelick was the chief strategy officer.
“His co-conspirators made millions more,” the government said in a court filing. “And he moved portions of the proceeds of his crimes through a series of corporate payment processing accounts he controlled and used the rest to purchase a luxury yacht layered through shell companies and straw owners.”
The case is US v. Shvartsman, 23-cr-307, US District Court, Southern District of New York .
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