The United States Department of Justice has charged the developer of Baller Ape NFT for a $2.6 million rug pulling scam that could land the latter in prison.
The U.S. Department of Justice (DOJ) released several new charges in four crypto-related cases on Thursday. The indictments target the developer of the Baller Ape NFT project, along with those involved with Titanium Blockchain Infrastructure Services, Circle Society, and EmpiresX.
The DOJ charged the developer of the Baller Ape NFT with rug pulling after the project amassed over $2 million from investors and subsequently vanished last year. The developer could face up to 40 years in prison if convicted on new wire fraud and money laundering charges.
Merits of the Case Against Baller Ape NFT Developer
The DOJ charged twenty-six-year-old Vietnamese Le Anh Tuan on Thursday with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering. The charges are related to the Baller Ape NFT project. The DOJ charged Tuan in the Central District of California.
The said project is the largest known NFT scheme that the DOJ has charged to date. Incidentally, the DOJ also filed charges against three other crypto-related criminal cases on the same day.
The DOJ accused Tuan of selling Baller Ape NFTs on the Solana blockchain, immediately ending the project, deleting its website, and stealing investors’ money.
“According to the indictment, shortly after the first day Baller Ape Club NFTs were publicly sold, Tuan and his co-conspirators engaged in what is known as a ‘rug pull,’ ending the purported investment project, deleting its website, and stealing the investors’ money,” the DOJ said.
As per the DOJ, after the purported rug pull, blockchain analytics revealed that the project’s developers resorted to “chain-hopping” to launder investor funds. Chain hopping involves converting coins, moving them across several cryptocurrency blockchains, and using decentralized cryptocurrency swap services to hide the money’s movement.
A Trio of DOJ Charges
As mentioned in the get-go, Baller Ape NFT’s Tuan is not the only recipient of DOJ charges. The DOJ also charged Michael Alan Stollery of California with securities fraud over his role as CEO and founder of Titanium Blockchain Infrastructure Services.
According to the charges, Stollery falsified white papers, planted false testimonials on the project’s website, and fabricated relationships with the U.S. Federal Reserve Board, Apple, and Pfizer to promote its initial coin offering (ICO). Stollery could face 20 years in prison if convicted.
In another case, Emerson Pires and Flavio Goncalves of Brazil and “head trader” Joshua David Nicholas of Florida were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. Pires, Goncalves, and Nicholas are three senior executives of EmpiresX, a cryptocurrency investment platform and an unregistered securities offering.
According to the DOJ, the charges are related to a purported global Ponzi scheme where cryptocurrency was used, and $100 million was generated from investors. Allegedly, the three promoted EmpiresX fraudulently and paid existing investors with cash collected from new investors. At the same time, the DOJ charged Pires and Goncalves with conspiracy to commit international money laundering.
If convicted on all counts, Pires and Goncalves could face up to 45 years in prison. On the other hand, Nicholas could face up to 25 years in prison.
Finally, David Saffron of Nevada, the owner of Circle Society, a cryptocurrency investment platform, faces criminal charges related to his fraudulent raising of $12 million from investors to participate in an unregistered commodity pool. Aside from misleading investors with what appeared to be an extravagant lifestyle, Saffron falsely alleged that he used a trading bot that would generate between 500 and 600 percent returns on the invested amount.
“To entice investors to invest, Saffron allegedly led investor meetings at luxury homes in the Hollywood Hills and elsewhere and traveled with a team of armed security guards in order to create the false appearance of wealth and success,” said the DOJ.
The DOJ charged Saffron with one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodities fraud, and one count of obstruction of justice. If convicted on all counts, Saffron could be spending 115 years in prison.
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