Airman and Analyst Charged with Money Laundering in NFT Scheme
Two individuals, including a senior airman and cyber analyst in the U.S. military, have been charged for money laundering in connection to an NFT “rug pull” scheme, a February 23 statement from U.S. Immigrations and Customs Enforcement (ICE) reveals.
Over $300,000 of Victims’ Funds Stolen
Devin Alan Rhoden (a.k.a Denny or Deviinz), 24, of Florida and Berman Jerry Nowlin Jr. (a.k.a Repulse or Zayous), 20, of Alabama were indicted for money laundering and conspiracy to commit wire fraud following an investigation by Homeland Security. According to the indictment, Rhoden and Nowlin “convinced hundreds of victims to invest tens of thousands in cryptocurrency in a non-fungible token collection named ‘Undead Tombstone.’” However, the duo failed to follow through on their victims’ investments, instead stealing and ultimately laundering the funds.
- Rhoden and Nowlin opened social media accounts to promote the “Undead Tombstone” NFT collection.
- The value of the collection increased significantly.
- Rhoden and Nowlin launched additional collections titled “Undead Apes” and “Undead Lady Apes.”
- The co-conspirators announced collaboration with a well-known NFT project.
- They abandoned Undead Tombstone and laundered the funds to cash.
A Classic “Rug Pull” Scheme In Action
The scheme, known as a “rug pull” amongst the crypto community, occurs when a founder or investor hypes up a product only to suddenly abandon it at its peak and disappear with the funds. Blockchain data firm Chainalysis alleges that over $2.8 billion was lost to “rug pull” incidents in 2022 alone. Similarly, Rhoden and Nowlin utilized a technique called “chain-hopping” to obfuscate customer investments, wherein funds are transferred between different cryptocurrencies in hopes of evading law enforcement.
- Rhoden and Nowlin employed a classic “rug pull” scheme.
- Chainalysis reports $2.8 billion lost to “rug pull” incidents in 2022.
- They used “chain-hopping” to hide customer investments.
Has Undead Apes Been Revived?
Coincidentally, on February 26th – three days after ICE’s statement – an NFT collection entitled “Undead Apes” was released on launchmynft.io by a user named AZEJGH…R57g. At the time of article publication, It is unclear whether the project is related to Rhoden and Nowlin.
If Convicted, Maximum Penalty of Five Years
If convicted, both Rhoden and Nowlin face a maximum penalty of five years in federal prison.
Hot Take: Airman and Analyst Charged with Money Laundering for NFT “Rug Pull” Scheme
A senior airman and cyber analyst in the U.S. military have been charged with money laundering in connection to an NFT “rug pull” scheme. Devin Alan Rhoden and Berman Jerry Nowlin Jr. convinced victims to invest in their non-fungible token collection but instead stole and laundered the funds. This classic scheme is prevalent in the crypto community, with billions lost to rug pulls in 2022 alone. Rhoden and Nowlin used chain-hopping to evade law enforcement. The release of a new NFT collection called “Undead Apes” raises questions about its connection to the indicted individuals. If convicted, Rhoden and Nowlin could face up to five years in prison.
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