Non-Fungible Token (NFT) Developer Charged in Multi-Million Dollar International Fraud Scheme | USAO-EDNY

A criminal complaint was filed today in federal court in Brooklyn charging Aurelien Michel, a French national living in the United Arab Emirates (UAE), with defrauding buyers of “Mutant Ape Planet” NFTs, a type of digital asset , for more than $2.9 million in cryptocurrency. The defendant was arrested last night at John F. Kennedy International Airport. His first appearance is scheduled for this afternoon before United States Magistrate Judge James R. Cho.

As part of the scheme, NFTs were marketed to buyers, who were falsely promised a variety of rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. After selling out of the NFTs, the buyers were “rug pulled” – a cryptocurrency scam in which a developer attracts investors but pulls out before the project is complete, leaving buyers with a worthless asset – since none of the promised the benefits were granted. Instead, millions worth of NFT buyers’ cryptocurrency was diverted to Michel’s personal benefit.

Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent in Charge, Homeland Security Investigations (HSI), New York and Thomas Fattorusso, Acting Special Agent, Internal Revenue Service -Criminal Investigation, New York (IRS-CI ), announced the charges.

“As alleged, the defendants used a traditional criminal scheme to defraud consumers eager to participate in a new market for digital assets,” U.S. Attorney Peace said. “Protection against fraud and manipulation extends to all consumers and investors, including those participating in the rapidly evolving market for NFTs and other crypto-assets. Our office is committed to bringing to justice any criminal actor who abuses markets for personal gain.”

“As alleged, Aurelien Michel ran a ‘rug pull’ scheme – stealing nearly $3 million from investors for his own personal use. Buyers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were tricked and received none of the promised benefits,” said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations (HSI) in New York. “HSI uses our extensive experience investigating financial crimes in conjunction with our cutting-edge cyber capabilities to uncover fraud and the perpetrators before the court.”

“It is alleged that Michel defrauded investors by making false representations of, among other things, giveaways, tokens with wagering functions and merchandise collections. When the NFTs were sold out, Michel allegedly stopped communicating and withdrew buyer funds from the company’s cryptocurrency wallets, lining his pockets with nearly $3 million of investors’ money,” stated IRS-CI Fattorusso. “Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions.”

As alleged in the criminal complaint, Mutant Ape Planet NFTs were a digital asset stored on the Ethereum blockchain. As an NFT, each Mutant Ape Planet NFT was unique, freely transferable and gave purchasers exclusive ownership of each NFT. The NFTs were marketed with promises of exclusive benefits potential buyers would receive. These benefits included exclusive opportunities for additional investments, giveaways, merchandise and other rewards. However, after sending the cryptocurrency and receiving the NFT, buyers received nothing while their cryptocurrency was diverted from the Mutant Ape Planet NFT project to cryptocurrency wallets controlled by defendant Aurelien Michel. In total, more than $2.9 million in buyers’ cryptocurrency was diverted as part of Michel’s scheme.

As alleged, in a social media chat with current and potential buyers, Michel admitted to the fraudulent “rug pull” but blamed the community of NFT buyers for their actions, saying: “We never intended to incubate, but the community became everything too toxic.”

The charges in the complaint are only allegations, and the defendant is presumed innocent unless and until proven otherwise.

The government’s case is being prosecuted by Assistant U.S. Attorneys Drew Rolle and Dylan Stern of the office’s Business and Securities Fraud Section with the assistance of Assistant U.S. Attorney William Daniels.

If you believe you have been a victim of this crime, please call the HSI Tips Line at 1-866-347-2423.

Accused:

AURELIE MICHEL
Age: 24
Dubai, United Arab Emirates

EDNY Docket No. 23-MJ-7