U.S. Air Force Senior Airman and Cyber Analyst Accused of Money Laundering in NFT Fraud Scheme

Two individuals, including a senior airman and a cyber analyst in the U.S. military, have been charged with money laundering related to an NFT “rug pull” scheme, as disclosed in a statement from U.S. Immigration and Customs Enforcement (ICE) on February 23.

Over $300,000 of Victims’ Funds Stolen

Devin Alan Rhoden (also known as Denny or Deviinz), 24, from Florida, and Berman Jerry Nowlin Jr. (also known as Repulse or Zayous), 20, from Alabama, were indicted for money laundering and conspiracy to commit wire fraud following an investigation by Homeland Security. The indictment states that Rhoden and Nowlin “persuaded hundreds of victims to invest tens of thousands in cryptocurrency in a non-fungible token collection called ‘Undead Tombstone.’” However, the pair did not fulfill their victims’ investments, instead opting to steal and ultimately launder the funds. Starting in March 2022, Rhoden and Nowlin created several social media accounts to promote “Undead Tombstone” to a wide audience. The value surged “significantly” in the subsequent weeks, with the duo launching collections named “Undead Apes” and “Undead Lady Apes.” The following month, the co-conspirators took to social media to announce their partnership “with a prominent and successful NFT project.” On that same day, Rhoden and Nowlin “abandoned Undead Tombstone” before laundering and converting the funds to cash. “In a matter of weeks, the three NFT collections resulted in Rhoden and Nowlin receiving over $300,000 in cryptocurrency from hundreds of victim-investors worldwide,” the indictment elaborates.

A Classic “Rug Pull” Scheme In Action

The scheme, referred to as a “rug pull” within the crypto community, occurs when a founder or investor promotes a product only to abruptly abandon it at its peak and vanish with the funds. Blockchain analytics firm Chainalysis reports that more than $2.8 billion was lost to “rug pull” incidents in 2022 alone. Similarly, Rhoden and Nowlin employed a method known as “chain-hopping” to obscure customer investments, where funds are shifted between various cryptocurrencies in an attempt to evade law enforcement. According to Elliptic, cross-chain-hopping reached unprecedented levels in 2023, with the value of illicit crypto laundered through this method estimated at $7 billion.

Has Undead Apes Been Revived?

Coincidentally, on February 26 – three days after ICE’s announcement – an NFT collection titled “Undead Apes” was launched on launchmynft.io by a user identified as AZEJGH…R57g.

PUBLIC FREE MINT IS LIVE https://t.co/hJKhwUHA3W#SolanaNFTs #Freemint #Solana #NFTCommunity

— Undead Apes ┃ FREE MINT (@Apes_undead) February 26, 2024

At the time of publication, it remains uncertain whether the project is connected to Rhoden and Nowlin.

If found guilty, both Rhoden and Nowlin could face a maximum sentence of five years in federal prison.

The post Senior U.S. Military Airman and Cyber Analyst Charged with Money Laundering for NFT “Rug Pull” Scheme appeared first on Cryptonews.