Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan allegedly inflated prices of 10,000 NFTs with false promises of developing a video game.
The U.S. Attorney’s Office in the Southern District of New York claims they then diverted funds and abandoned the project. Let’s explore more about this NFT Scam.
NFT Scammers Charged with Fraud
U.S. Attorney Damian Williams stressed that laws against fraud apply to digital NFTs. He underscored that NFT fraud is a serious offense warranting accountability. FBI’s James Smith said deceiving customers breaches trust and ethics.
The defendants reportedly generated over $2 million from Evolved Apes NFT sales on September 24, 2021, during the peak of the “NFT summer.” Their website featured sections like “roadmap” and “phases,” creating an appearance of legitimacy.
“Phase 5” falsely claimed a forthcoming fighting game exclusive to Evolved Ape NFT holders. However, the site was abruptly taken down less than two weeks later, leaving investors empty-handed.
Source: Cointelegraph
Notably, Waleedh attempted to transfer stolen funds to a personal wallet but faced a temporary block by the cryptocurrency exchange pending an investigation into the fund source. Allegedly, he falsely claimed to need funds for his grandmother’s cancer treatment to expedite the withdrawal process.
The U.S. Attorney’s Office seeks forfeiture of $875,850 in Tether (USDT) held in a specified wallet address, “0x519…6ed70.” The charges of wire fraud and money laundering each carry a maximum 20-year prison sentence in New York, highlighting the severity of the allegations against the defendants.
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