{"id":55471,"date":"2024-11-06T16:32:49","date_gmt":"2024-11-06T21:32:49","guid":{"rendered":"https:\/\/rehs.com\/eng\/?p=55471"},"modified":"2024-11-06T16:32:49","modified_gmt":"2024-11-06T21:32:49","slug":"nft-scammers-convicted","status":"publish","type":"post","link":"https:\/\/rehs.com\/eng\/2024\/11\/nft-scammers-convicted\/","title":{"rendered":"NFT Scammers Convicted"},"content":{"rendered":"<div id=\"attachment_55472\" style=\"width: 223px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_.png\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" aria-describedby=\"caption-attachment-55472\" class=\"wp-image-55472\" src=\"https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_-300x169.png\" alt=\"An example of blockchain code for an NFT, made of white digits on a black background.\" width=\"213\" height=\"120\" srcset=\"https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_-300x169.png 300w, https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_-448x250.png 448w, https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_.png 640w\" sizes=\"(max-width: 213px) 100vw, 213px\" \/><\/a><p id=\"caption-attachment-55472\" class=\"wp-caption-text\">An example of blockchain code for an NFT<\/p><\/div>\n<p><span data-preserver-spaces=\"true\">The creators of an NFT series have recently been convicted of operating a \u2018rug pull\u2019 scam to steal investors\u2019 money.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">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 <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/news.artnet.com\/app\/news-upload\/2024\/11\/blockchain-110524-1024x768.jpg\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">UndeadApes and the Undead Lady Apes<\/span><\/a><span data-preserver-spaces=\"true\">, both of which are zombie versions of the once popular, now controversial NFT series <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rollingstone.com\/wp-content\/uploads\/2021\/10\/RS-BoardApe_Lead_5.jpg\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bored Apes Yacht Club<\/span><\/a><span data-preserver-spaces=\"true\">. 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.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The fraud scheme in question started around April 2022 when the duo created a new series called <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/pczheptobk47sb6xwxezrnkluxmk3eoibvntqs2llec47bmehd7a.arweave.net\/eLJyPm4KufkH17XJmLVLpditkcgNWzhLS1kFz4WEOP4?ext=png\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Undead Tombstone<\/span><\/a><span data-preserver-spaces=\"true\">. According to court documents, the two developed what is known as a \u2018rug pull\u2019 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. <\/span><span data-preserver-spaces=\"true\">Nowlin and Rhoden used a Solana blockchain<\/span><span data-preserver-spaces=\"true\">, both<\/span><span data-preserver-spaces=\"true\"> to create the NFTs and collect the cryptocurrency payments.<\/span><span data-preserver-spaces=\"true\"> 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 \u2018chain-hopping\u2019, 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.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">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\u2019s sentencing scheduled for November 20th and Nowlin\u2019s 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 <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.justice.gov\/opa\/pr\/samuel-bankman-fried-sentenced-25-years-his-orchestration-multiple-fraudulent-schemes#:~:text=Samuel%20Bankman%2DFried%2C%20also%20known,orchestration%20of%20multiple%20fraudulent%20schemes.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the conviction of its CEO, Sam Bankman-Fried<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The creators of an NFT series have recently been convicted of operating a \u2018rug pull\u2019 scam to steal investors\u2019 money. Berman Jerry Nowlin Jr., known by the screen names Repulse and Zayous, is a 21-year-old man from the Tampa area &hellip; <a href=\"https:\/\/rehs.com\/eng\/2024\/11\/nft-scammers-convicted\/?contemporary=N\">More&#8230;<\/a><\/p>\n","protected":false},"author":6,"featured_media":55472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,1],"tags":[15,429,367,588,269,536,11,386,32,390],"class_list":["post-55471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rehs-galleries","category-rehs-contemporary","tag-comments-on-the-art-market","tag-contemporary-art","tag-crime-and-punishment","tag-crypto-currency","tag-legal-matters","tag-nft","tag-rehs-contemporary-news","tag-tales-from-the-dark-side","tag-the-dark-side","tag-theft"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.7 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>NFT Scammers Convicted - Rehs Galleries<\/title>\n<meta name=\"description\" content=\"The creators of an NFT series have recently been convicted of operating a \u2018rug pull\u2019 scam to steal investors\u2019 money.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rehs.com\/eng\/2024\/11\/nft-scammers-convicted\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NFT Scammers Convicted\" \/>\n<meta property=\"og:description\" content=\"The creators of an NFT series have recently been convicted of operating a \u2018rug pull\u2019 scam to steal investors\u2019 money.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rehs.com\/eng\/2024\/11\/nft-scammers-convicted\/\" \/>\n<meta property=\"og:site_name\" content=\"Rehs Galleries\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/RehsGalleriesInc\" \/>\n<meta property=\"article:published_time\" content=\"2024-11-06T21:32:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/rehs.com\/eng\/wp-content\/uploads\/2024\/11\/NFT_diagram.svg_.png\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"360\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Nathan Scheer\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Nathan Scheer\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/2024\\\/11\\\/nft-scammers-convicted\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/2024\\\/11\\\/nft-scammers-convicted\\\/\"},\"author\":{\"name\":\"Nathan Scheer\",\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/#\\\/schema\\\/person\\\/1d33fd182b28afdad8fc3548ffe6bdc4\"},\"headline\":\"NFT Scammers Convicted\",\"datePublished\":\"2024-11-06T21:32:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/2024\\\/11\\\/nft-scammers-convicted\\\/\"},\"wordCount\":429,\"publisher\":{\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/rehs.com\\\/eng\\\/2024\\\/11\\\/nft-scammers-convicted\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/rehs.com\\\/eng\\\/wp-content\\\/uploads\\\/2024\\\/11\\\/NFT_diagram.svg_.png\",\"keywords\":[\"Comments on the Art Market\",\"Contemporary art\",\"Crime and Punishment\",\"Crypto Currency\",\"Legal Matters\",\"NFT\",\"Rehs Contemporary - Art World News\",\"tales from the dark side\",\"The Dark Side of the Art World\",\"theft\"],\"articleSection\":[\"Rehs 19th &amp; 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