Six charged in cryptocurrency and NFT fraud schemes

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

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 charged in California with one count of conspiracy to commit wire fraud and conspiracy to commit international money laundering in connection with the scheme of the Baller Ape Club.

Shortly after the Baller Ape Club’s public sales began, Tuan and unnamed co-conspirators “gunned down” investors, taking down the group’s website and taking $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 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 initial coin offering.

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

California federal prosecutors say Reseda CEO Michael Alan Stollery, 54, falsified documents sent to potential investors showing the project’s purpose and falsely claimed his company had dealings with the US Federal Reserve. and 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 man was charged in California 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 around $12 million from investors to a fraudulent crypto fund that claimed to trade in futures and commodities markets, prosecutors said.

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

“In reality, Mr. Saffron was operating an illegal Ponzi scheme to defraud victimized investors and was using the funds for his personal benefit,” said Ryan L. Korner, Special Agent in Charge of the IRS Criminal Investigations Field Office. in Los Angeles.

Safran faces up to 115 years in prison if convicted.

The fourth case announced by prosecutors this week was charged 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 one count each of conspiracy to commit securities fraud and conspiracy to commit a wire fraud in a crypto-Ponzi scheme that prosecutors said defrauded about $100 million 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, worked with “head trader” Nicholas, 28, to promote the platform using false returns 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 previous investors with cash. ‘money obtained from later EmpiresX investors,’ the U.S. attorney’s office said.

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

Los Angeles Times

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