Two Defendants Charged In Non-Fungible Token (“NFT”) Fraud And Money Laundering Scheme

 

Defendants Executed a $1 Million NFT Fraud Scheme in January 2022, and Were Preparing to Execute a Second Prior to Their Arrests

 Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), and Daniel B. Brubaker, Acting Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that  ETHAN NGUYEN, a/k/a “Frostie,” a/k/a “Jakefiftyeight,” a/k/a “Jobo,” a/k/a “Joboethan,” a/k/a “Meltfrost,” and ANDRE LLACUNA, a/k/a “heyandre,” were charged in a criminal complaint with conspiracy to commit wire fraud and conspiracy to commit money laundering, in connection with a million-dollar scheme to defraud purchasers of NFTs advertised as “Frosties.”  Rather than providing the benefits advertised to Frosties NFT purchasers, NGUYEN and LLACUNA transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control.  Prior to their arrests in Los Angeles, California, NGUYEN and LLACUNA were preparing to launch the sale of a second set of NFTs advertised as “Embers,” which was anticipated to generate approximately $1.5 million in cryptocurrency proceeds. 

U.S. Attorney Damian Williams said: “NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.”

IRS-CI Special Agent-in-Charge Thomas Fattorusso said: “NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development. You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you. Our team here at IRS-CI and our partners at HSI closely track cryptocurrency transactions in an effort to uncover alleged schemes like this one.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The trending market and demand for NFT investments has not only drawn the attention of real artists, but scam artists as well.  The arrested thieves allegedly hid behind online identities where they promised investors rewards, giveaways, and exclusive opportunities before implementing their ‘rug pull’ scheme – leaving investors with empty pockets and no legitimate investment. HSI New York’s Dark Web & Cryptocurrency Task Force worked closely with our IRS-CI partners to identify and shut down these fraudsters as they prepared to launch the sale of yet another NFT project that would have likely scammed countless others.”

USPIS Acting Inspector-in-Charge Daniel B. Brubaker said: “The rise and popularity of various cryptocurrencies have changed the landscape of buying and selling investments, leading to ample opportunities for new fraud schemes. Today’s arrests involved Non-Fungible Tokens (“NFTs"), opening the door to alternative investment options and substantial risk. These assets may seem like a good deal or a way to become wealthy, but in many cases, as in this situation, only lead to the loss of your money. Postal Inspectors will pursue fraudsters with our law enforcement partners in any consumer market and advise consumers to pursue emerging investment trends with diligence and skepticism."

As alleged in the Complaint[1]:

Since in or about January 2022, IRS-CI and HSI have been investigating a NFT fraud scheme based on reports from purchasers of Frosties utility NFTs[2] that they had been defrauded in what is colloquially referred to as a “rug pull.”  As the term suggests, a “rug pull” refers to a scenario where the creator of an NFT and/or gaming project solicits investments and then abruptly abandons a project and fraudulently retains the project investors’ funds.  According to the official Frosties website, Frosties purchasers would be eligible for holder rewards, such as, inter alia, giveaways, early access to a metaverse game, and exclusive mint passes to upcoming Frosties seasons.  In reality, on or about January 9, 2022, NGUYEN and LLACUNA, whose legal identities were disguised to Frosties NFT purchasers, abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.  A screenshot taken from the Frosties website is shown below:

 

 

Prior to their arrests, NGUYEN and LLACUNA were advertising a second NFT project under the name “Embers,” which, based on similarities to the Frosties NFT project, is believed to be another fraud scheme that was expected to launch on or around March 26, 2022.  A screenshot taken from the Embers website is shown below:

 

 

ETHAN VINH NGUYEN, 20, and ANDRE MARCUS QUIDDAOEN LLACUNA, 20, are each charged with one count of commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.

The maximum potential sentences described above are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the assigned judge.

Mr. Williams praised the outstanding investigative work of HSI, IRS-CI, and USPIS. 

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Danielle M. Kudla is in charge of the prosecution.

If you believe that you have been a victim of this crime, please contact HSI Special Agent Paul Nugent at paul.nugent@ice.dhs.gov.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation as to the defendants charged in the Complaint.

[2] A “utility” NFT offers holders added benefits, such as reward programs, giveaways, and early access to events for NFT holders.

MAYOR ADAMS APPOINTS ABBY JO SIGAL EXECUTIVE DIRECTOR OF MAYOR’S OFFICE OF TALENT AND WORKFORCE DEVELOPMENT

 

 New York City Mayor Eric Adams today announced the appointment of Abby Jo Sigal as executive director of the Mayor’s Office of Talent and Workforce Development. In this role, Sigal will help deliver on the mayor’s workforce vision to prepare New Yorkers, particularly those from underserved communities, for the jobs of the future, in sectors including the life sciences, clean energy, and 21^st-century manufacturing, among others. Sigal will also work in partnership with members of the New York City Workforce Development Board to oversee federal investments under the Workforce Innovation and Opportunity Act into strategic adult and youth workforce development initiatives.

 

“As my economic blueprint makes clear, investing in our city’s workforce is critical to an equitable recovery, and having a leader at the helm of the Office of Talent and Workforce Development with the knowhow to ‘Get Stuff Done’ will be essential in helping our city grow. Abby Jo Sigal is that leader,” said Mayor Adams. “For too long, far too many people in our city — primarily those living in Black and Brown neighborhoods — have been left behind. Equipping them with the skills they need to compete in our modern economy and burgeoning industries will be a top priority for my administration, and I’m so proud to have a proven leader like Abby spearheading that effort.”

 

“Abby Jo Sigal is a proven leader, and I am excited that she is joining our team at this critical moment for New York City,” said Deputy Mayor for Economic and Workforce Development Maria Torres-Springer. “The Office of Talent and Workforce Development will play a leading role in realizing our vision for a workforce development system that is better integrated with our economic development efforts, and which will yield real results for New Yorkers.”

 

“I am humbled and honored that Mayor Adams and Deputy Mayor Torres-Springer tapped me to work in the administration on behalf of the people of New York City,” said Abby Jo Sigal, incoming executive director, Mayor’s Office of Talent and Workforce Development. “New York has the opportunity to build back its economy stronger and more equitably than before the pandemic — and through strategic investment and alignment of resources, together, we can transform how we, as a city, develop our talent and position all New Yorkers for lifelong career success.”

 

Sigal will lead the city’s effort to connect New Yorkers to quality jobs, as outlined in the recently released plan, “Rebuild, Renew, Reinvent: A Blueprint for New York City’s Economic Recovery.” She will work with stakeholders from the public and private sectors to reimagine the city’s talent development system so that it promotes the economic security of every New Yorker, meets the talent needs of employers, and contributes to a robust and inclusive economy.  

 

At the head of the newly renamed Office of Talent and Workforce Development, Sigal will work across multiple agencies, launching, convening, and staffing the ‘Future of Workers’ taskforce, a working group of industry experts — including higher education, job training providers, research institutions, labor, and employers — to develop a citywide, early-education-to-adult talent development vision to address short-term recovery needs and long-term structural challenges.  The office will seek out opportunities to streamline and improve coordination among the more than two dozen city and state agencies that manage workforce programs, as well as The City University of New York (CUNY), the New York City Department of Education (DOE), nonprofits, intermediaries, and employers.

 

“An equitable recovery for our city starts with meaningful investments in our most valuable resource: New Yorkers,” said Deputy Mayor for Strategic Initiatives Sheena Wright. “Abby Jo Sigal has been a tireless champion for uplifting New Yorkers across the five boroughs and building pipelines to good-paying jobs, and I especially look forward to working with her on youth workforce development initiatives to expand on our administration’s efforts to help young people thrive.”

 

“Every student who graduates a New York City public school should be ready to get a good paying job or go to college, and Abby will be a vital partner in realizing this goal,” said New York City Department of Education Chancellor David C. Banks. “Abby is a tireless advocate for creating quality career pathways for young people that blend academic and work-based learning and has a keen sense for how to create a citywide culture amongst community and business leaders that will foster the expansion of this work. I look forward to working closely with Abby to benefit all of our young people.”

 

“As a nonprofit leader, Abby Jo Sigal has served as a powerful voice for creative and collaborative policies and programs that expand economic opportunities for low-income New Yorkers,” said David Fischer, executive director, Mayor’s Office of Youth Employment (MOYE). “The team at MOYE is delighted that she will bring her knowledge, energy, and idealism to the Mayor’s Office of Talent and Workforce Development, in service to its vital mission of economic mobility and empowerment.”

 

“Abby Jo Sigal is a tireless and proven leader, who will marshal the cross-sector resources and best thinking needed to deliver on the mayor’s ambitious vision for a talent pipeline worthy of our great city and its thriving industries,” said Saskia Levy Thompson, program director, Carnegie Corporation of New York; and chair, Mayor Adams’ Education Transition Committee. “Carnegie Corporation has invested in career pathways for a quarter of a century because we believe all young people should experience the rigorous education, real-world learning experiences, and professional networks necessary for long-term success and economic mobility. We were an early supporter of HERE to HERE — a Bronx-based youth-serving coalition that, under Abby’s leadership, demonstrated what is possible when K-12, higher education, and employers partner to expand opportunities for young people, and cultivate the brilliant, home-grown workforce that will build our future.”

 

“Having worked with Abby over the years that she served as executive director of the James and Judith K. Dimon Foundation and founding CEO of HERE to HERE, I know her solid commitment to ensuring opportunities for CUNY students to enter the city’s workforce and build rewarding careers, particularly during the ongoing post-pandemic recovery,” said CUNY Chancellor Félix V. Matos Rodríguez. “Abby has been a key ally and advocate for our students; she understands the talent that CUNY students bring to the table, along with the benefits of a truly inclusive workforce that mirrors the diversity of New York City. We congratulate Abby on her appointment and look forward to working with her to foster the continued growth the city’s thriving economy and economic prosperity of CUNY students.”

 

“I have known Abby Jo Sigal for more than 20 years and we have worked side-by-side. I believe Abby Jo will do for the City of New York what she has always done — lead, shape opinion, build consensus, and transform lives,” said Kirk Goodrich, president, Monadnock Development; and chairman, New York State Association for Affordable Housing. “The mayor could not have made a better choice to lead the Office of Talent and Workforce Development for all New Yorkers.”

 

“Abby Jo Sigal is a unique leader who focuses on doing no less than transforming an entire system without ever losing sight of listening to and engaging young people directly, one person at a time — accounting for their strengths, aspirations, and potential,” said Angie Kamath, dean, New York University School of Professional Studies. “The city has exhibited incredible foresight by entrusting the workforce strategy and transformation of New York City in the hands of Abby Jo Sigal.”

 

“Abby Jo will bring deep knowledge and experience to the challenge of integrating the city’s public education and workforce development initiatives into a coordinated system with seamless connectivity to employers, large and small. This is an important appointment,” said Kathryn Wylde, president and CEO, Partnership for New York City.

 

About Abby Jo Sigal

 

Abby Jo Sigal will serve as executive director of the Mayor’s Office of Talent and Workforce Development. For over 25 years, working in various roles and types of organizations, Sigal has been committed to revitalizing New York City neighborhoods to better serve local residents. As the founding CEO of HERE to HERE, Sigal currently leads a diverse Bronx-based team committed to aligning with key stakeholders around the goal of career success for New York City students — demonstrating best practices and translating those best practices into common practice.

 

She also serves as the executive director of The James and Judith K. Dimon Foundation. Sigal has extensive experience in community development, public/private partnerships, real estate finance, impact investing, and working with community-based organizations.

 

Prior to HERE to HERE and the Dimon Foundation, Sigal was the senior vice president of Innovation at Enterprise Community Partners, a national housing organization, where she provided leadership across the multiple business lines and markets for strategy, new product development, knowledge management, and impact investing.

 

Prior to that role, she ran the Enterprise New York market, deploying $200 million annually in equity, debt, and grants; developing and implementing programs; and enacting policy. Early in her career, she oversaw the design and development of New York City’s Hudson River Park along the westside and launched its first summer youth program.

 

Sigal holds a bachelor’s degree from Yale in Philosophy and master’s degrees from University of California, Berkeley in Business Administration and City & Regional Planning.

 

Sigal will report to Deputy Mayor for Economic and Workforce Development Maria Torres-Springer.

 

NYGOP Chairman Langworthy, Dutchess County Executive and NY-19 Congressional Candidate Marc Molinaro and Dutchess Sheriff Kirk Imperati Blast Delgado on Support of Dangerous Pro-Criminal Agenda

 

Called on Him to Return Blood Money from AOC & PACs That Support Defunding Police

New York State Republican Chairman Nick Langworthy, Dutchess County Executive Marc Molinaro and candidate for congress in NY-19, and Dutchess County Sheriff Kirk Imperati today blasted Antonio Delgado for his support of the deadly bail reform law and taking money from AOC and radical left PACs that support defunding the police. 

 

Chairman Langworthy traveled to Dutchess County where he noted that flipping NY-19 from blue to red is one of the Party’s top priorities this fall. He slammed national Democrats for their recent 180 on support for police now that polling shows voters are outraged by their bail law and “defund the police” movement. 

 

“Don’t let him fool you--A vote for Antonio Delgado is a vote for Nancy Pelosi and AOC,” said NYGOP Chairman Langworthy. “He supports the dangerous bail law, takes campaign money from the radical left and wants to empty our jails while tying the hands of law enforcement. Democrats like Antonio Delgado created this public safety crisis and the only way to fix it is to throw them out of office and elect common-sense leaders like Marc Molinaro who will restore safety and sanity to our communities.” 

 

"Antonio Delgado is attempting to dupe his constituents into believing he is pro-safety and pro-law enforcement when he is in fact an ardent supporter of New York's failed cashless bail laws and defunding the police,” said Dutchess County Executive and candidate for congress Marc Molinaro. “If he was serious about his all-too-convenient election-year flip-flop on this issue, he'd return the money he's received from anti-police groups like AOC's PAC, and refuse the Working Families Party's nomination." 

From left to right: Dutchess County Sheriff Kirk Imperati, Dutchess County Legislator Will Truitt, NYGOP Chairman Nick Langworthy, Dutchess County Executive Marc Molinaro, Dutchess County Legislator Ben Gellar

Governor Hochul Updates New Yorkers on State's Progress Combating COVID-19 - MARCH 24, 2022

 

911 Hospitalizations - Under 1,000 for Seven Consecutive Days 

Highest Daily Test Results in Past Three Weeks

5 COVID-19 Deaths Statewide Yesterday

 Governor Kathy Hochul today updated New Yorkers on the state's progress combating COVID-19. Additionally, Governor Hochul today announced that Division of Homeland Security and Emergency Services Commissioner Jackie Bray was on-site for the delivery of 100,000 over-the-counter COVID tests at the Food Bank of Central New York in Syracuse today, as food banks across the state this week are receiving test kits from the State. Photos of the delivery are available here. These efforts are part of Governor Hochul’s previously announced plan to make 20 million over-the-counter tests available to various organizations, primarily schools and adult-care facilities, throughout the spring. DHSES and the New York National Guard will continue to work together to distribute millions of tests over the coming months to help keep New Yorkers safe.

“New Yorkers have shown time and time again that they are resilient in the face of crises, and the COVID-19 pandemic has been no different,” Governor Hochul said. “While hard work has led to enormous progress, we cannot afford to let our guard down. The vaccine and booster are key to moving forward safely through this pandemic, and I encourage all New Yorkers to take advantage of these tools so we can continue to keep ourselves and loved ones safe and healthy.

Today's data is summarized briefly below:  

• Test Results Reported – 162,273
• Total Positive – 3,450
• Percent Positive – 2.13%
• 7-Day Average Percent Positive – 2.02%
• Patient Hospitalization – 911 (-22)
• Patients Newly Admitted – 120
• Patients in ICU – 150 (-11)
• Patients in ICU with Intubation – 68 (-2)
• Total Discharges – 289,824 (+150)
• New deaths reported by healthcare facilities through HERDS - 5
• Total deaths reported by healthcare facilities through HERDS – 55,070   

The Health Electronic Response Data System is a NYS DOH data source that collects confirmed daily death data as reported by hospitals, nursing homes and adult care facilities only. 

• Total deaths reported to and compiled by the CDC – 70,108 

This daily COVID-19 provisional death certificate data reported by NYS DOH and NYC to the CDC includes those who died in any location, including hospitals, nursing homes, adult care facilities, at home, in hospice and other settings.      

• Total vaccine doses administered – 37,362,271
• Total vaccine doses administered over past 24 hours – 14,129
• Total vaccine doses administered over past 7 days – 92,009
• Percent of New Yorkers ages 18 and older with at least one vaccine dose – 92.0%
• Percent of New Yorkers ages 18 and older with completed vaccine series – 83.4%
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) – 95.0%
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) – 86.0%
• Percent of New Yorkers ages 12-17 with at least one vaccine dose (CDC) – 82.3%
• Percent of New Yorkers ages 12-17 with completed vaccine series (CDC) – 72.4%
• Percent of all New Yorkers with at least one vaccine dose – 81.4%
• Percent of all New Yorkers with completed vaccine series – 73.7%
• Percent of all New Yorkers with at least one vaccine dose (CDC) – 89.4% 
• Percent of all New Yorkers with completed vaccine series (CDC) – 76.0%

Each New York City borough's 7-day average percentage of positive test results reported over the last three days is as follows:  

BOROUGH	Monday, March 21, 2022	Tuesday, March 22, 2022	Wednesday, March 23, 2022
Bronx	0.66%	0.70%	0.74%
Brooklyn	1.16%	1.30%	1.37%
Manhattan	1.87%	2.04%	2.12%
Queens	1.04%	1.13%	1.19%
Staten Island	1.07%	1.16%	1.30%