An example of blockchain code for an NFT
The creators of an NFT series have recently been convicted of operating a ‘rug pull’ scam to steal investors’ money.
Berman Jerry Nowlin Jr., known by the screen names Repulse and Zayous, is a 21-year-old man from the Tampa area who, along with US Air Force officer Devin Alan Rhoden, has been found guilty of conspiracy to commit wire fraud and money laundering in relation to their NFT series. The pair previously found success with two NFT series known as the UndeadApes and the Undead Lady Apes, both of which are zombie versions of the once popular, now controversial NFT series Bored Apes Yacht Club. The UndeadApes series was very successful with investors and collectors. Each work initially sold for $5, but some examples were resold for as much as $360.
The fraud scheme in question started around April 2022 when the duo created a new series called Undead Tombstone. According to court documents, the two developed what is known as a ‘rug pull’ scheme. They minted 632 NFTs while lying about their value to lure buyers and investors to the project. Specifically, they misleadingly stated that the new series was a collaboration between the UndeadApes brand and the popular NFT collection Stoned Apes. Stoned Apes denied there being such a collaboration. When buyers began reaching out about the false statements, Nowlin and Rhoden deleted all their social media accounts and blocked off any way for their victims to communicate with them. Their confused customers were only left with the NFT, which was now devoid of all value. Nowlin and Rhoden used a Solana blockchain, both to create the NFTs and collect the cryptocurrency payments. After severing contact, they transferred the cryptocurrency funds off the Solana blockchain onto a different, Ethereum-powered blockchain to hide their ill-gotten gains. This is known as ‘chain-hopping’, and has become a common way to launder money via cryptocurrency. Nowlin and Rhoden swindled $135K using the Undead Tombstone rug pull scheme. In total, they made nearly $400K from all of their NFT ventures.
A Florida jury found both men guilty of the charges against them on October 31st. They each face a maximum of five years in prison, with Rhoden’s sentencing scheduled for November 20th and Nowlin’s on January 23rd. This is only the latest installment in the saga of bad press and legal troubles for those involved in cryptocurrency and blockchain technologies, most notably the collapse of the FTX exchange and the conviction of its CEO, Sam Bankman-Fried.
NFT Scammers Convicted
An example of blockchain code for an NFT
The creators of an NFT series have recently been convicted of operating a ‘rug pull’ scam to steal investors’ money.
Berman Jerry Nowlin Jr., known by the screen names Repulse and Zayous, is a 21-year-old man from the Tampa area who, along with US Air Force officer Devin Alan Rhoden, has been found guilty of conspiracy to commit wire fraud and money laundering in relation to their NFT series. The pair previously found success with two NFT series known as the UndeadApes and the Undead Lady Apes, both of which are zombie versions of the once popular, now controversial NFT series Bored Apes Yacht Club. The UndeadApes series was very successful with investors and collectors. Each work initially sold for $5, but some examples were resold for as much as $360.
The fraud scheme in question started around April 2022 when the duo created a new series called Undead Tombstone. According to court documents, the two developed what is known as a ‘rug pull’ scheme. They minted 632 NFTs while lying about their value to lure buyers and investors to the project. Specifically, they misleadingly stated that the new series was a collaboration between the UndeadApes brand and the popular NFT collection Stoned Apes. Stoned Apes denied there being such a collaboration. When buyers began reaching out about the false statements, Nowlin and Rhoden deleted all their social media accounts and blocked off any way for their victims to communicate with them. Their confused customers were only left with the NFT, which was now devoid of all value. Nowlin and Rhoden used a Solana blockchain, both to create the NFTs and collect the cryptocurrency payments. After severing contact, they transferred the cryptocurrency funds off the Solana blockchain onto a different, Ethereum-powered blockchain to hide their ill-gotten gains. This is known as ‘chain-hopping’, and has become a common way to launder money via cryptocurrency. Nowlin and Rhoden swindled $135K using the Undead Tombstone rug pull scheme. In total, they made nearly $400K from all of their NFT ventures.
A Florida jury found both men guilty of the charges against them on October 31st. They each face a maximum of five years in prison, with Rhoden’s sentencing scheduled for November 20th and Nowlin’s on January 23rd. This is only the latest installment in the saga of bad press and legal troubles for those involved in cryptocurrency and blockchain technologies, most notably the collapse of the FTX exchange and the conviction of its CEO, Sam Bankman-Fried.