6 Charged In Cryptocurrency And NFT Fraud Schemes That Raised Over $130 Million

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Six people have been charged in four separate cryptocurrency fraud cases involving more than $130 million in losses, including the largest NFT scheme charged to date, federal prosecutors said this week.

According to the prosecutors, the plan involved a group called the Baller Ape Club, which claimed to sell NFTs, or non-functioning tokens, in the form of cartoon images of monkeys.

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A group with a similar theme, the Bored Ape Yacht Club, is one of the most popular NFT distributors in the world, with endorsements from Snoop Dogg, Tom Brady and other celebrities. His NFTs have sold for hundreds of thousands of dollars, although prices have fallen sharply in recent weeks.

Le Anh Tuan, 26, of Vietnam, was indicted in California on one charge of conspiracy to commit fraud and conspiracy to launder international money in connection with the Baller Ape Club plan.

Shortly after the Baller Ape Club’s public sale began, Tuan and unnamed co-conspirators “shot investors,” took down the group’s website and took $2.6 million in investments, according to the U.S. Attorney’s Office for the Central District of California.

Tuan and the others laundered the money, prosecutors said, funneling it through cryptocurrencies and cryptocurrency services.

If convicted, Tuan faces up to 40 years in prison.

In another case, the founder and former CEO of Titanium Blockchain Infrastructure Services was charged with one count of securities fraud related to the company’s initial coin offering.

New cryptocurrency projects use ICOs to raise funds, similar to an IPO of a company’s shares.

California federal prosecutors say Michael Alan Stollery, 54, the CEO of Reseda, forged documents sent to potential investors showing the purpose of the project, falsely alleging that his company had business with the US Federal Reserve. and with companies such as Apple, Disney and Pfizer.

The ICO has raised approximately $21 million from investors.

Stollery faces up to 20 years in prison if convicted.

In a third case, a Las Vegas, California man was charged with four counts of wire fraud and one count of obstruction of justice, conspiracy to commit wire fraud and conspiracy to commit commodity fraud.

David Saffron, 49, used his Circle Society cryptocurrency investment platform to raise about $12 million from investors for a fraudulent crypto fund that claimed to trade in futures and commodities markets, prosecutors said.

Safran allegedly told investors it was using a “trading bot” to generate returns of up to 600%. He held investor meetings at homes in the Hollywood Hills and traveled with armed guards to “create a false semblance of wealth and success,” prosecutors said.

“In reality, Mr. Saffron was carrying out an illegal Ponzi scheme to defraud investors who were victims of scams and used the money for his personal benefit,” said Ryan L. Korner, special agent in charge of the IRS Criminal Investigations Field. Los Angeles office.

Safran faces up to 115 years in prison if convicted.

The fourth case announced by prosecutors this week was indicted in the Southern District of Florida.

Emerson Pires and Flavio Goncalves, both of Brazil, and Joshua David Nicholas of Stuart, Florida, have been charged with conspiracy to commit securities fraud and conspiracy to commit wire transfer fraud in a crypto-Ponzi scheme that prosecutors said had been defrauded million dollars from investors. Pires and Goncalves, both 33, were also charged with conspiracy to commit international money laundering.

Pires and Goncalves, founders of crypto investment platform EmpiresX, teamed up with “head trader” Nicholas, 28, to promote the platform using fake returns guarantees to investors, prosecutors said.

Blockchain analysis shows that Pires and Goncalves subsequently laundered investors’ money through a foreign-based cryptocurrency exchange and implemented a Ponzi scheme by paying previous investors in cash “money obtained from subsequent EmpiresX investors,” the US law firm said.

If convicted, Nicholas faces up to 25 years in prison; Pires and Goncalves are each at risk for up to age 45.

US arrests three over suspected $722 million cryptocurrency fraud

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