Two Individuals Charged With Non-Fungible Token “Rug Pull” And Laundering Proceeds Through The Solana And Ethereum Blockchains

Tampa, Florida – United States Attorney Roger B. Handberg announces the return of an indictment charging Devin Alan Rhoden (24, Pinellas Park), a/k/a “Denny” and “Deviinz,” and Berman Jerry Nowlin, Jr. (20, Huntsville, AL), a/k/a “Repulse” and “Zayous,” with conspiracy to commit wire fraud and money laundering. If convicted, Rhoden and Nowlin each face a maximum penalty of five years in federal prison.

According to court documents, in March 2022, Rhoden and Nowlin minted two non-fungible token (NFT) collections on the Solana blockchain named “UndeadApes” and “Undead Lady Apes.” In the weeks following the mint, the average sale price of both NFT collections (pictured below) increased significantly.

In April 2022, Rhoden and Nowlin announced their intention to mint a third NFT collection named “Undead Tombstone.” In the announcement and subsequent advertisements, Rhoden and Nowlin made a number of material misrepresentations to attract victim-investors. On April 19, 2022, Rhoden and Nowlin minted 632 Undead Tombstone NFTs, resulting in approximately $135,000 USD in cryptocurrency being sent to wallets under the Rhoden and Nowlin’s control. Rhoden and Nowlin then abandoned the mint without satisfying several of the representations made to victim-investors, commonly known as a “rug pull.”

Rhoden and Nowlin transferred the fraud proceeds from the Solana blockchain to the Ethereum blockchain, also known as “chain-hopping.” This obfuscation technique is used by cybercriminals and money launderers to make identifying and tracing illicit funds more difficult. Rhoden and Nowlin then used the cryptocurrency to purchase U.S. dollars and transferred the currency into their respective bank accounts. In a matter of weeks, the three NFT collections resulted in Rhoden and Nowlin receiving more than $300,000 USD in cryptocurrency from hundreds of victim-investors all over the world.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the U.S. Air Force Office of Special Investigations, Homeland Security Investigations (HSI), the Department of Defense – Office of Inspector General, the Defense Criminal Investigative Service, and the Pasco Sheriff's Office. It will be prosecuted by Assistant United States Attorney Carlton C. Gammons.