Quick take:
- This is the largest known NFT scheme charged to date.
- Le was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering.
- If convicted of both charges, Le could face up to 40 years in prison.
The United States Department of Justice (DOJ), along with federal law enforcement partners, announced on Thursday that it has charged Baller Ape Club NFT scammer Le Anh Tuan for his involvement in the largest-known NFT scheme charged to date.
Le Anh Tuan is a Vietnamese national who was involved in the Baller Ape Club NFT project that sold digital art depicting an ape with various traits. According to the indictment, shortly after the first day Baller Ape Club NFTs were publicly sold, Tuan and his co-conspirators engaged in a “rug pull,” ending the purported NFT project, deleting its website, and stealing the investors’ money.
Le and his co-conspirators collected around $2.6 million from buyers and laundered funds by converting them into different cryptocurrencies and moving them across multiple blockchains in a process known as “chain-hopping”. They also used decentralised cryptocurrency swap services to hide the trail of the stolen funds.
He was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering in the Central District of California. If convicted of all counts, Le could face up to 40 years in prison.
“The Department of Justice and our partners are dedicated to using every available tool to protect consumers and investors from fraud and manipulation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “These indictments reflect our deep commitment to prosecuting individuals involved in cryptocurrency fraud and market manipulation.”
This is not the first NFT rug pull case facing legal repercussions. In March, the DOJ announced its first-ever case of NFT fraud committed by Frosties NFT creators Ethan Nguyen and Andre Llacuna. The pair were charged with conspiracy to commit wire fraud and money laundering.
Shortly after collecting $1.1 million worth of ETH through the sale of Frosties, the project’s creators shut down the Frosties Discord channel and disappeared. Prior to their arrests, Nguyen and Llacuna were advertising a second NFT project under the name “Embers,” which, based on similarities to the Frosties NFT project, is believed to be another fraud scheme that was expected to launch on or around Mar 26.
“These cases serve as a crucial reminder that some con artists hide behind trendy buzzwords, but at the end of the day they are simply seeking to separate people from their money,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “We will continue to work with our law enforcement partners to educate and protect potential investors about both traditional and trendy investments.”
The DOJ has been cracking down on NFT fraud. Last month, the former head of product at Opensea was arrested in New York for running an NFT insider trading scheme.
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