Damian Williams, Federal Attorney for Southern New York, Thomas Fatrusso, Internal Revenue Service in New York, Special Agent for Criminal Investigation (“IRS-CI”), Ricky J. Patel, Department of Land Security (“HSI”) ETHAN NGUYEN, a / k / a “Frostie”, a / k / a “Jake fiftyeight”, a / k / a “Jobo”, a / k / a “Joboe than”, a / k / a were announced. “Meltfrost” and ANDRELLA CUNA, a / k / a “heyandre” commit a wire fraud conspiracy and money laundering in connection with a $ 1 million plan to deceive advertised NFT buyers A criminal charge was filed in a conspiracy. As “Frosty”. NGUYEN and LLACUNA have transferred the cryptocurrency revenues of the scheme to various cryptocurrency wallets under their control, rather than offering the benefits advertised to Frosties NFT buyers. Prior to being arrested in Los Angeles, California, NGUYEN and LLACUNA were preparing to launch a second set of NFTs, advertised as “Embers.” This is expected to generate approximately $ 1.5 million in cryptocurrency revenue.
Damian Williams, a lawyer in the United States, said: “NFTs have been around for years, but mainstream interest has skyrocketed these days. Wherever there is money to make money, scammers look for ways to steal it. As we insist, Nguyen and Lacuna promised investors the benefits of Frosty NFTs, but when they sold out, they pulled the rug from underneath the victims, shutting down the website almost immediately and sending money. Our job as a law enforcement agency is to protect investors from fraudsters looking for payday. “
Thomas Fattorusso, Special Agent for IRS-CI, said: “NFTs represent a new era of financial investment, but the same rules apply to investing in NFTs and developing real estate. You raise money for business opportunities, abandon your business, and investors We cannot give up the money we have provided to you. Here at IRS-CI our team and HSI partners are closely tracking cryptocurrency transactions to uncover such suspicious schemes. “
Ricky J. Patel, Deputy Special Agent for HSI, said: The arrested thief hid behind an online ID, promised investors rewards, giveaways, and exclusive opportunities before implementing the “rug pull” scheme. HSI New York’s Dark Web & Cryptocurrency Task Force is working closely with IRS-CI partners as they prepare to launch yet another NFT project that may have deceived countless others. Identified and shut down the scammer. “
Daniel B. Brubaker, Deputy Inspector for USPIS, said: Today’s arrests included non-fungible tokens (“NFT”), opening the door to alternative investment options and substantial risks. These assets may look like a good deal or a way to get wealthy, but often, like this situation, postal inspectors are fraudulent with law enforcement partners in every consumer market. Track teachers and advise consumers to pursue new investment trends with diligence and skepticism. “
As claimed in the complaint[1]:
Since around January 2022, the IRS-CI and HSI have been investigating NFT fraud schemes based on reports from buyers of the Frosties Utility NFT.[2] It means that he was fooled by what is colloquially called “ragpur”. As the term implies, “rag pull” refers to a scenario in which the creator of an NFT and / or game project solicits an investment and then suddenly abandons the project, fraudulently holding the funds of the project investor. According to the Frosties official website, Frosties buyers are, among other things, eligible for owner rewards such as giveaways, early access to Metaverse games, and exclusive mint passes to the next Frosties season. In fact, around January 9, 2022, NGUYEN and LLACUNA, who disguised their legal identities as Frosties NFT buyers, suddenly abandoned the Frosties NFT project within hours of the Frosties NFT’s sold out, and the Frosties website. Deactivated and sent about $ 1.1 million. Cryptocurrencies are multiple transactions designed to obfuscate the original source of funds, going from the scheme to various cryptocurrency wallets under control. Below is a screenshot taken from the Frosties website.
NGUYEN and LLACUNA advertised a second NFT project under the name “Embers” before being arrested. This is believed to be another fraudulent plan expected to begin around March 26, based on its similarities to the Frosties NFT project. Below is a screenshot taken from the 2022.Embers website.
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ETHAN VINH NGUYEN (20 years old) and ANDRE MARCUS QUIDDAOEN LLACUNA (20 years old) have each been charged with one transfer fraud in violation of 18USC §1349. And one count of plots to do money laundering in violation of 18USC §1956 (h). It can be sentenced to up to 20 years in prison.
The most likely judgments above are set by Parliament and the defendant’s judgment is decided by the assigned judge and is therefore provided here for informational purposes only.
Williams praised the excellent research work of the HSI, IRS-CI, and USPIS.
This case is being handled by a complex Office fraud and cybercrime unit. The prosecution is handled by US Federal Prosecutor Assistant Daniel M. Kudra.
If you believe you are a victim of this crime, please contact HSI Special Agent Paul Nugent ([email protected]).
[1] As the introductory phrase means, the entire text of the complaint, and the description of the complaint contained herein, constitutes only the allegation, and all the facts contained herein are allegations relating to the defendant charged with the complaint. Should be treated as.
[2] “Utility” NFTs offer additional benefits to holders, including reward programs, giveaways, and early access to events for NFT holders.