Homeland Security Investigations Brings Charges in Four Crypto-Related Fraud Cases

On June 30, 2022, the United State Department of Justice, together with the FBI and Homeland Security Investigations (HSI), announced criminal charges against six defendants in four separate cases involving crypto-related fraud, including the Baller Ape case.

The Baller Ape case

In the case of United States v. Le Ahn Tuan, HSI explained in a separate release that Tuan was involved in the Baller Ape Club, an NFT project that created and sold NFTs that looked like basketball-playing apes - akin to the famous Bored Ape Yacht Club (BAYC).

On October 1, 2021, the highly anticipated Baller Ape Club NFT drop went live with 5,000 apes available for mint at the price of two Solana. Shortly after the mint was sold out, the Baller Ape Club admins deleted their Discord, websites, and Twitter accounts.

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According to the indictment, shortly after the first day during which Baller Ape Club NFTs were publicly sold, Tuan and his co-conspirators engaged in a "rug pull," shutting down the Baller Ape Club, deleting its website, and stealing the money that had been earned via the NFT sales.

According to the HSI release, “based on blockchain analytics, shortly after the rug pull, Tuan and co-conspirators laundered investors’ funds through "chain-hopping," a form of money laundering in which one type of coin is converted to another type and funds are moved across multiple cryptocurrency blockchains. Tuan and co-conspirators also used decentralized cryptocurrency swap services to obscure the trail of Baller Ape investors’ stolen funds.”

In total, Tuan and co-conspirators obtained approximately $2.6 million from investors, which represents the largest NFT-scam charged to date.

Based on the Baller Ape rug pull, Tuan was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering. If convicted of all counts, Tuan faces up to 40 years in prison.

In the release, HSI highlighted its work with TRM to investigate the case, "This investigation and prosecution exemplify the importance of public-private partnerships," said Raul O. Aguilar, HSI deputy assistant director. "As a result of our strong relationships with private industry partners, HSI received an intelligence lead and put that lead in the hands of HSI Baltimore to conduct the investigation leading to this indictment. HSI would like to thank our partners at TRM Labs for being diligent in combatting the criminal exploitation of digital assets and ensuring that victims are protected by the law."

Other cases

In addition to the Baller Ape case, DOJ brought charges in three other cases including a crypto-based Ponzi scheme that generated about $100 million from investors; a crypto ICO scam which raised about $21 million from investors through fraud; and a crypto commodities scheme in which the defendant solicited investors to participate in an unregistered commodity pool by making false representations about returns.

TRM proudly supports law enforcement

At TRM our mission is to support the tireless efforts of law enforcement to keep the crypto-economy safe. That is also why TRM, alongside our partners, created Chainabuse.com as a place where the crypto community can report scams and frauds in order to stop bad actors from abusing the growing crypto-economy.

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