Six charged with fraud with cryptocurrency and NFT

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

This scheme, the prosecution said, involved a group called the Baller Monkey Club who claimed to sell NFTs, or non-fungible tokens, in the form of cartoon images of monkeys.

A group with a similar theme, Bored Ape Yacht Club, is one of the world’s most popular NFT distributors, with support from Snoop Dogg, Tom Brady and other celebrities. The 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 each of conspiracy to commit electronic fraud and conspiracy to commit international money laundering in connection with the Baller Ape Club scheme.

Shortly after the Baller Monkey Club’s public sale began, Tuan “joked” and unnamed co-conspirators, deleted 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, by moving it 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 count of securities fraud in connection with the company’s first coin offering.

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

California federal prosecutors said Reseda CEO Michael Alan Stollery, 54, forged papers sent to potential investors testifying to the project’s purpose and falsely claimed that his business was related to the US Federal Reserve and companies such as Apple, Disney and Pfizer.

The ICO raised around $ 21 million from investors.

Stollery faces up to 20 years in prison if convicted.

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

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

Saffron is said to have told investors that he 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 the false appearance of wealth and success,” prosecutors said.

“In reality, Mr. Saffron operated an illegal Ponzi scheme to defraud the victim’s investors and used the funds to his own personal advantage,” said Ryan L. Korner, special agent in charge of the IRS ‘Los Angeles Criminal Investigation Office.

Saffron risks up to 115 years in prison if convicted.

The fourth case announced by the prosecution this week was charged in the southern district of Florida.

Emerson Pires and Flavio Goncalves, both from Brazil, and Joshua David Nicholas from Stuart, Fla., Were charged with one count each of conspiracy to commit securities fraud and conspiracy to commit wire fraud in connection with a crypto-Ponzi scheme such as prosecutors said had swindled. around $ 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 “main trader” Nicholas, 28, to promote the platform using false returns for investors, prosecutors said.

“Blockchain analysis shows that Pires and Goncalves then laundered investors’ funds through a foreign-based cryptocurrency exchange and ran a Ponzi scheme by paying former investors with money taken 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 are each up to 45 years old.