Nonfungible Token (NFT) developer pleads guilty to an international scheme to defraud NFT purchasers


Date: November 14, 2023


Aurelien Michel, a French national who had been residing in the United Arab Emirates (UAE), pled guilty at the federal courthouse in Brooklyn, New York to conspiring to commit wire fraud in connection with defrauding purchasers of "Mutant Ape Planet" NFTs, a type of digital asset. Today's proceeding took place before United States Magistrate Judge Vera M. Scanlon. When sentenced, Michel faces up to five years in prison. Michel has also agreed to pay $1.4 million in forfeiture. Michel was charged in January 2023.

Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (CI), New York, and Special Agent-in-Charge, Homeland Security Investigations (HSI), New York announced the guilty plea.

"With today's guilty plea, Michel has admitted that he conspired with others to defraud consumers eager to participate in a new digital asset market," stated United States Attorney Breon Peace. "Our Office is acutely aware that criminal actors are taking advantage of the constant pace of innovation in the digital asset space and the investing public's desire to become involved in cryptocurrency to perpetrate large-scale frauds. Holding these criminal actors accountable and protecting the public is, and will remain, a priority of this Office."

Mr. Peace expressed his appreciation to the New York Police Department, U.S. Customs and Border Protection, the U.S. Postal Inspection Service, Port Authority of New York and New Jersey Police, and Nassau County Sheriff's Department.

"While Michel purported to sell dream NFTs backed with rewards and benefits, he defrauded investors, turning their dream into a nightmare of deception and losses. There is no excusing this kind of greed, and today's guilty plea brings Michel one step closer to realizing his own nightmare—behind bars," said Thomas M. Fattorusso, Special Agent in Charge of IRS CI New York.

"Aurelien Michel enticed investors with promises of capitalizing on the NFT trend, only to abandon the project after amassing nearly $3 million in what's described as a 'rug-pull scheme.' The defendant, accused of misleading the Mutant Ape NFT community, claimed innocence and even labeled victims as 'too toxic.' However, these attempts to evade responsibility came to a conclusion with today's plea," stated Ivan J. Arvelo, Special Agent in Charge of HSI New York. "In the face of evolving investment landscapes, HSI remains vigilant, utilizing cutting-edge tools to safeguard individuals from unscrupulous actors and their attempts to exploit well-meaning investors."

According to court filings and facts presented during the plea proceeding, Michel and his co-conspirators marketed the NFTs to purchasers by falsely promising them numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. But Michel and his co-conspirators intentionally failed to deliver on these promises, diverting millions of dollars' worth of proceeds for their personal benefit while continuing to represent that the benefits would be forthcoming.

The government's case is being prosecuted by Assistant United States Attorneys Drew G. Rolle and Dylan A. Stern of the Office's Business and Securities Fraud Section with assistance from Paralegal Specialist William Daniels.

If you believe that you have been a victim of this crime, please call the HSI Tip Line at 1-866-347-2423.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.