Six people have been indicted in four separate cryptocurrency fraud cases involving losses of more than $130 million, including the largest single NFT scheme ever accused, federal prosecutors announced this week.
Prosecutors said the plot involved a group called the Baller Ape Club, which claimed to be selling NFTs, or non-replaceable tokens, in the form of cartoon images of monkeys.
A group with a similar theme, Bored Ape Yacht Club is one of the most popular NFT distributors in the world, backed by Snoop Dogg, Tom Brady and other celebrities. NFTs have been sold for hundreds of thousands of dollars, but prices have fallen sharply in recent weeks.
Le Anh Tuan, 26, a Vietnamese man, was charged in California with one count of conspiracy to commit electronic fraud and international money laundering conspiracy in connection with the Baller Ape Club scheme.
Shortly after the public sale of Baller Ape Club began, Tuan and the unnamed co-conspirators “remembered” investors by deleting the group’s website and receiving $2.6 million in investments, according to the US Central District attorney’s office.
Prosecutors said Tuan and others laundered money by moving it through cryptocurrencies and crypto services.
Tuan faces up to 40 years in prison if found guilty.
In a separate lawsuit, the founder and former CEO of Titanium Blockchain Infrastructure Services was charged with a series of securities frauds in connection with the company’s initial coin offering.
New cryptocurrency projects use ICOs to raise funds, similar to an initial public offering of a company’s stock.
Federal prosecutors in California falsely allege that Reseda’s 54-year-old CEO, Michael Alan Stollery, falsified paperwork sent to prospective investors who testified to the purpose of the project, and that his business has ties to the US Federal Reserve Board and companies such as Apple, Disney and Pfizer. he said he did.
The ICO has raised approximately $21 million from investors.
Stollery faces up to 20 years in prison if found guilty.
In a third case, a Las Vegas man in California was charged with four counts of electronic fraud and one each of obstruction of justice, conspiracy to commit electronic fraud and conspiracy to commit commodity fraud.
Prosecutors said that 49-year-old David Saffron used cryptocurrency investment platform Circle Society to raise nearly $12 million from investors into a bogus crypto fund that allegedly trades in futures and commodities markets.
Saffron allegedly told investors he used a “trading bot” to generate returns of up to 600%. Prosecutors said he held investor meetings at homes in the Hollywood Hills and traveled with armed security guards to “create a false image of wealth and success”.
“In reality, Mr. Saffron was running an illegal Ponzi scheme to defraud victim investors and used the funds for his own personal gain,” said Ryan L. Korner, special agent in charge of the IRS’s Los Angeles criminal investigation field office.
Safran faces up to 115 years in prison if found guilty.
The fourth case, announced by prosecutors this week, was indicted in Florida’s Southern District.
Emerson Pires and Flavio Goncalves, both Brazilians, and Joshua David Nicholas of Stuart, Fla., were charged with conspiracy to commit securities fraud and electronic fraud in connection with a crypto-Ponzi scheme that prosecutors say has been defrauded. about $100 million from investors. Pires and Goncalves, both 33 years old, were also charged with conspiracy to commit international money laundering.
Prosecutors said Pires and Goncalves, founders of crypto investment platform EmpiresX, worked with 28-year-old “chief trader” Nicholas to promote the platform using fake return guarantees for investors.
“Blockchain analytics shows that Pires and Goncalves subsequently laundered investors’ funds through a foreign-based cryptocurrency exchange and operated a Ponzi scheme by paying previous investors with money obtained from subsequent EmpiresX investors,” the US attorney’s office said. Said.
Nicholas would face up to 25 years in prison if found guilty; Pires and Goncalves up to 45 years each.