Non-Fungible Token (NFT) Developer Charged in Multi-Million Dollar International Fraud Scheme
Purchasers of “Mutant Ape Planet” NFTs Were Defrauded of $2.9 Million
A criminal complaint was unsealed today in federal court in Brooklyn charging Aurelien Michel, a French national residing in the United Arab Emirates (UAE), with defrauding purchasers of “Mutant Ape Planet” NFTs, a type of digital asset, of more than $2.9 million in cryptocurrency. The defendant was arrested last night at John F. Kennedy International Airport. His initial appearance is scheduled for this afternoon before United States Magistrate Judge James R. Cho.
As part of the scheme, NFTs were marketed to purchasers, who were falsely promised numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. After selling out of the NFTs, the purchasers were “rug pulled” – a cryptocurrency scam in which a developer attracts investors, but pulls out before the project is complete, leaving buyers with a worthless asset – as none of the promised benefits were provided. Instead, millions worth of the NFT purchasers’ cryptocurrency was diverted for Michel’s personal benefit.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the charges.
“As alleged, the defendant used a traditional criminal scheme to defraud consumers eager to participate in a new digital asset market,” stated United States Attorney Peace. “Protection from fraud and manipulation extends to all consumers and investors, including those participating in the fast-evolving market for NFTs and other crypto assets. Our Office is committed to bringing to justice any criminal actor abusing any markets for their own gain.”
“As alleged, Aurelien Michel perpetrated a ‘rug pull’ scheme - stealing nearly $3 million from investors for his own personal use. Purchasers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were deceived and received none of the promised benefits,” said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations (HSI) in New York. “HSI uses our extensive experience investigating financial crime in conjunction with our cutting edge cyber capabilities to uncover fraud and bring the perpetrators to justice.”
“It’s alleged that Michel defrauded investors by making false representations of, amongst other things, giveaways, tokens with staking features, and merchandise collections. Once the NFTs were sold-out, Michel allegedly ceased communications and withdrew purchasers’ funds from the company’s cryptocurrency wallets, lining his pockets with nearly $3 Million of investors’ money,” stated IRS-CI Fattorusso. “Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions.”
As alleged in the criminal complaint, Mutant Ape Planet NFTs were a digital asset stored on the Ethereum blockchain. As an NFT, each Mutant Ape Planet NFT was unique, freely transferrable, and gave purchasers exclusive ownership over each NFT. The NFTs were marketed with promises of exclusive benefits potential purchasers would receive. Those benefits included exclusive opportunities for additional investments, giveaways, merchandise, and other rewards. However, after sending their cryptocurrency and obtaining the NFT, purchasers received nothing while their cryptocurrency was diverted from the Mutant Ape Planet NFT project to cryptocurrency wallets controlled by the defendant Aurelien Michel. In total, more than $2.9 million in purchasers’ cryptocurrency was diverted as part of the Michel’s scheme.
As alleged, in a social media chat with current and prospective purchasers, Michel admitted to the fraudulent “rug pull,” but blamed the community of NFT purchasers for his actions, stating, “We never intended to rug but the community went way too toxic.”
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Drew Rolle and Dylan Stern of the Office’s Business and Securities Fraud Section with assistance from Paralegal Specialist William Daniels.
If you believe that you have been a victim of this crime, please call the HSI Tip Line at 1-866-347-2423.
Dubai, United Arab Emirates
E.D.N.Y. Docket No. 23-MJ-7