NFT sellers charged in $1 million fraud and money laundering scheme

The creators were both charged with wire fraud and conspiracy to commit money laundering
The creators were both charged with wire fraud and conspiracy to commit money laundering
Published: Mar. 25, 2022 at 7:30 AM EDT
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NEW YORK, N.Y. (WECT) - The U.S. Attorney’s Office for the Southern District of New York charged two Non Fungible Token (NFT) sellers with fraud and conspiracy to commit money laundering following a “rug pull” scheme in January 2022.

Per U.S. Attorney Damian Williams in a release on March 24, “As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.”

The Frosties NFT cryptocurrency was sold as utility NFTs which would provide benefits such as access to a game and giveaways. After all of the NFTs were sold, the website for Frosties was taken down, and the creators transferred the $1.1 million they received from the project to various cryptocurrency accounts. Before they were arrested, a website called “embers” was created by the same people and planned to launch this Saturday.

“These assets may seem like a good deal or a way to become wealthy, but in many cases, as in this situation, only lead to the loss of your money. Postal Inspectors will pursue fraudsters with our law enforcement partners in any consumer market and advise consumers to pursue emerging investment trends with diligence and skepticism,” says USPIS Inspector-in-Charge Daniel B. Brubaker in the release.

Williams commended the Ricky J. Patel of the Department of Homeland Security, Thomas Fattorusso of the Internal Revenue Service and Daniel B. Brubaker of the U.S. Postal Inspection Service for their work in the investigation. Per the announcement:

“ETHAN VINH NGUYEN, 20, and ANDRE MARCUS QUIDDAOEN LLACUNA, 20, are each charged with one count of commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.”

“The maximum potential sentences described above are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the assigned judge.”

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