6 charged in cryptocurrency and NFT fraud schemes that raised over $ 130 million

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Six people have been indicted 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 prosecutors, this scheme involved a group called the Baller Monkey Club, which claimed to sell NFTs, or non-fungible tokens, in the form of cartoon images of monkeys.

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A group with a similar theme, Bored Ape Yacht Club, is one of the most popular NFT distributors in the world, with the support of 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 charged in California with one count of conspiracy to commit fraud and conspiracy to commit international money laundering under the Baller Ape Club scheme.

Shortly after the Baller Ape Club’s public sale began, Tuan and unnamed co-investors “shot” down, downed 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, sending them through cryptocurrencies and cryptocurrency services.

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

In a separate case, the founder and former CEO of Titanium Blockchain Infrastructure Services was charged with one case of securities fraud in connection with the company’s first coin offering.

New cryptocurrency projects use ICOs to raise funds, equivalent to an initial public offering of shares in a company.

California federal prosecutors say Reseda’s CEO Michael Alan Stollery, 54, forged documents sent to potential investors showing the project’s purpose and mistakenly claimed his company had links to the US Federal Reserve and companies such as Apple, Disney and Pfizer.

The ICO has raised approximately $ 21 million from investors.

Stollery risks up to 20 years in prison if convicted.

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

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

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

“In fact, Mr. Saffron ran an illegal Ponzi scheme to defraud victims of investors and used the funds to his personal advantage,” said Ryan L. Korner, Special Agent in charge of the IRS Criminal Investigations Field Office in Los Angeles.

Saffron risks 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 from Brazil, and Joshua David Nicholas from Stuart, Florida, have been charged in each case with conspiracy to commit securities fraud and conspiracy to commit a wire fraud in a crypto-Ponzi scheme, which Prosecutors said the fraud involved about $ 100 million from investors. Pires and Goncalves, both 33, were also charged with conspiracy to commit international money laundering.

Pires and Goncalves, the founders of the crypto-investment platform EmpiresX, worked with “principal trader” Nicholas, 28, to promote the platform using false return guarantees for investors, prosecutors said.

“Blockchain analysis shows that Pires and Goncalves then laundered investors’ funds through a foreign-based cryptocurrency exchange and operated a Ponzi scheme by paying former investors cash.” Money obtained from later EmpiresX investors, “the U.S. Attorney’s Office said.

If Nicholas is convicted, he risks up to 25 years in prison; Pires and Goncalves each risk up to 45 years.


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2022 Los Angeles Times.
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