This week US prosecutors announced that six people have been indicted in four fraudulent NFT and crypto schemes involving more than $130 million in losses to investors. Included in the indictments were a Ponzi scheme, an ICO, investment fraud and an NFT scam. The indictments send out a clear message to those engaged in NFT fraud and scams; you will pay for your schemes.
Baller Ape NFT Scam
The NFT scam is the largest NFT case before courts and relates to the Baller Ape Club.
The scammers based their scheme on the BAYC collection, which is a runaway success and has lots of celebrity endorsements.
In fact, a lot of people ended up buying their NFT apes and cartoon images as collectible items via Baller Ape Club. However, Ballers Ape Club was a scam from the start.
Le Anh Tuan a 26-year-old Vietnamese national has been charged with one count of conspiracy to commit fraud and one of conspiracy to commit international money laundering. If found guilty Mr Tuan could face up to 40 years in federal prison.
The moment the public sales of Baller Ape Club had started, Tuan and three other unknown co-conspirators decided to pull the rug from under the investors. In layman’s terms, Tuan and other co-conspirators deleted the website of the NFT group and took off with the entire investment of $2.6 million.
According to investigators Tuan and his conspirators used chain chopping to hide their fraudulent behavior.
The official word from the U.S. Attorney is that Tuan and co-conspirators at large may have been engaged in several money laundering cases through different crypto services and platforms.
Ponzi Scheme
In the Ponzi scheme indictment, an American citizen(Joshua David Nicholas) and two Brazilians (Emerson Pires and Flavio Goncalves) were charged with defrauding investors of $100 million at a court in the Southern District of Florida.
The Brazilian founders of the crypto investment platform, EmpiresX, conspired with their “head trader’, Mr Nicholas to “promote the platform using false guarantees of returns for investors” said the prosecutor. The Brazilian founders could face up to 45 years in jail, while Mr Nicholas could be hit with 25 years behind bars.
ICO Fraud
Michael Alan Stolley owner of Titanium Blockchain Infrastructure Services was charged with a fraudulent investment fund relating to the company ICO. In the whitepaper released to accompany the ICO Stolley falsely stated that TBIS had business relations with some of the world’s largest companies including Disney and Pfizer.
The investment fund raised $12 million by promising returns of 500 to 600 per cent by using a bot to invest in futures and commodities markets.
Crypto Fraud
Another recent case before the courts, involved Jeremy Spence, a crypto trader who goes by the name of Coin Signals. The judge, in that case, sentenced Mr Spence to 42 months in prison after he defrauded over 170 people of $5 million.
In another case, the 49-year-old David Saffron, took advantage of his crypto site Circle Society to fraudulently collect over $12 million from investors. This fraudulent cryptocurrency funding was used for illegal crypto trading and became part of the commodity markets. In one case, Saffron managed to convince investors to use a trading bot to yield returns as high as 600%. If convicted, Saffron could face over 115 years in federal prison.
Afterthoughts
After publishing so many articles relating to NFT scams, it is nice to see that some of these bad players are getting their just desserts. Always check out our latest news to keep abreast of developments in the NFT space.
