French developer Aurélien Michel is charged with Fraud for alleged $ 2.9 NFT’s rug pull
On January 4, 2023, French footballer, Aurélien Michel, was arrested by US authorities as he passed through JFK airport.
He was immediately taken into custody and brought before a federal judge in Brooklyn, where he was arraigned on a complaint charging him with being the leader of a scheme involving NFT fraud. He posted bail on February 1, 2023 and has been at liberty in the U.S. since that time.
Recently, former prosecutor Matthew Galluzzo appeared on PBS Channel 13 to explain several legal issues relating both the recent verdict in the Trump civil sex abuse trial and the new indictment of Congressman George Santos.
Matthew Galluzzo is a former sex crimes prosecutor who now represents both plaintiffs and defendants in civil sex abuse cases. He also regularly defends individuals accused of white collar crimes and fraud in federal court.
The link to the interview is available here.
Now that Trump has been indicted in Manhattan (New York County) for alleged crimes relating to the falsification of business records, some experts have hypothesized that the judge overseeing the case will order a pre-trial gag order over the parties – including the prosecutors, the defense attorneys, and the famous defendant himself, ex-President Trump. This post discusses the legal issues surrounding a gag order and the practical implications of it in this case.
A gag order basically instructs a party to a litigation to refrain from speaking publicly about the case. A New York judge overseeing a criminal case has the power to issue a gag order over one or more of the parties to the case. Gag orders are relatively rare, however. They certainly are not done as a matter of routine. The Constitution guarantees the right to free speech, after all, and courts are generally loath to abridge those rights. However, gag orders may be necessary to protect other valuable rights under the Constitution, such as the right to a fair trial (contained in the Sixth Amendment of the Bill of Rights), as well as the all-important “true administration of justice”.
Sometimes defense attorneys ask courts to order prosecutors not to talk about their clients’ cases publicly for fear that they would prejudice any potential jurors. For example, the attorneys for Ghislaine Maxwell – convicted in Manhattan federal court of assisting notorious sex trafficker Jeffrey Epstein – contended that the federal prosecutors had tainted potential jurors by hosting press conferences in which they laid out the facts of their case. Ultimately that application for a gag order was denied, but the federal judge did admonish the attorneys to adhere to the rules of professional conduct for lawyers, which generally prohibits attempts to unfairly influence juries (or potential juries) outside of the courtroom. After all, the paramount rule of trials was explained by Justice Holmes in 1907: “The theory of our system is that the conclusions to be reached in a case will be induced only by evidence and argument in open court, and not by any outside influence, whether private talk or public print.” Patterson v. Colorado, 205 U.S. 454, 462 (1907).
Now that Donald Trump has been indicted in New York County (Manhattan) Supreme Court on felony charges relating to the alleged falsification of business records, one of the more interesting issues to consider is the possibility of selecting a jury to hear Mr. Trump’s case.
As a preliminary matter, it seems reasonably likely that a trial will in fact happen. Having indicted a former president on numerous felony counts, it seems unlikely that they will make Mr. Trump a plea bargain offer to anything less than a felony. To anyone who knows Mr. Trump at all, it seems inconceivable that he would admit to any guilt of a crime, especially with a looming presidential election. Thus, in the absence of a plea bargain (which resolves most cases), a trial should happen.
That being said, it is quite likely that the trial might not happen before the presidential election next year. One can only imagine what would happen to the indictment if Mr. Trump were elected president prior to the trial taking place.
On April 2, Matthew Galluzzo was quoted as a legal expert by Canadian national news as to whether Mr. Trump could receive a fair trial in Manhattan. The link to the article is available here.
On March 31, Matthew Galluzzo – a criminal defense attorney and former Manhattan prosecutor – appeared on NPR’s Morning Edition with host Sacha Pfeiffer to discuss the new Trump indictment in New York County. A link to his interview is available here.
Mr. Galluzzo recently obtained an excellent result for a client in Brooklyn federal court charged with Conspiracy to Commit Access Device Fraud, in violation of 18 U.S.C. Section 1029(b)(2) and (c)(1)(A)(ii). The client pleaded guilty pursuant to a plea agreement with a sentencing range under the Guidelines of 12-18 months in prison. Following the client’s guilty plea, Mr. Galluzzo presented to the federal judge the evidence of the defendant’s background, his immigration to the United States, his family, and his employment history. With a persuasive sentencing memorandum – including supporting documents and letters from the client’s family – Mr. Galluzzo successfully persuaded the federal judge to sentence the client to just over 7 months in prison, instead of the 12-18 months recommended by the Federal Sentencing Guidelines.
The truth of the matter is that the vast majority of federal defendants plead guilty. It is important for federal defense attorneys to be skillful in negotiating favorable plea bargains. But even more important for a federal defense attorney is the ability to craft persuasive sentencing arguments. These can make a real difference for federal defendants – sometimes it is the difference between a long sentence and a short sentence, or a sentence of probation instead of a prison sentence.
Matthew Galluzzo is a former Manhattan prosecutor and experienced federal criminal defense attorney. If you or a loved one have been charged with a federal crime, you should strongly consider retaining him. His significant experience advocating for defendants in federal court helps him obtain excellent results for his clients.
Recently, Matthew Galluzzo obtained an excellent result for a client in federal court. One of four co-defendants in a conspiracy to ship stolen cars to Africa, our client was charged with violating 18 USC Section 2312. As alleged in the indictment, the group shipped millions of dollars of stolen and fraudulent-obtained cars to Africa (primarily Ghana). Galluzzo’s client pleaded guilty and faced a sentencing range of 10-16 months under the Federal Sentencing Guidelines (offense level 12 and Criminal History Category I).
Mr. Galluzzo submitted to the court a detailed sentencing memorandum describing the client’s difficult upbringing and hard work providing for his family. Mr. Galluzzo submitted character letters from the client’s family, friends and pastor in support of his good character and reputation. The court reviewed these submissions and, after a sentencing hearing in the Southern District of New York, decided not to impose an additional prison sentence upon him. The client will be on supervised release and able to continue with his current employment. (The client spent about six days in prison before arranging for the posting of his bail at the outset of the case and following his arrest.)
In addition, the client could have been subject to millions of dollars in restitution, meaning he might have been ordered to pay back money to the conspiracy’s victims to compensate them for the crimes. However, Mr. Galluzzo argued to the Court that such an award would have been unfair in his client’s case, given his minor role in the offense and his limited finances. The Court agreed not to impose any forfeiture or restitution penalties, as well.
This week, American law enforcement officers arrested Aurelien Michel, a French national living in the UAE, as he passed through JFK International Airport in New York City. He has since been arraigned before a federal magistrate judge in the Eastern District of New York (Brooklyn) on federal wire fraud charges, pursuant to 18 USC Section 1343. A complaint unsealed in federal court alleges that Mr. Michel advertised and marketed a series of Mutant Ape NFTs (non-fungible tokens) and collected nearly three million dollars in sales of various cryptocurrencies from numerous buyers and investors. However, it is further alleged that Mr. Michel never delivered the NFTs to his investors, but instead transferred this money to various accounts controlled by him. The complaint alleges that he later apologized on the platform Discord for the “rug pull” (i.e. a slang term for failing to deliver after receiving funds) because the community had become too “toxic.”
It would appear from the complaint that Mr. Michel has an obvious defense that he did not intend to defraud anyone, and that he fully intended to give his customers their NFTs eventually. He may have received the funds and then encountered difficulty in acquiring the NFTs for his customers due to volatile market conditions or other issues.
It is always difficult to estimate sentencing exposure at this stage of a criminal case, but preliminary estimates might suggest the following for Mr. Michel:
On December 14, federal prosecutors in Manhattan announced two new indictments against several individuals accused of conspiring to commit wire fraud and money laundering through alleged phony cryptocurrency schemes called Forcount and IcomTech. These cases present interesting challenges for both prosecutors and defense attorneys, however, because of the high volatility of the cryptocurrency market and the oftentimes lax regulation of the industry.
The allegations in these cases suggest that the defendants used the public enthusiasm and fervor around cryptocurrency investing to run what amounted to a Ponzi scheme with a crypto appearance. The defendants allegedly went to crypto conventions and investor events and flashed conspicuous wealth in order to persuade people to invest in their cryptocurrencies. The defendants allegedly used a software platform to allow investors to see their investments growing, but the defendants would not allow the investors to withdraw funds. Meanwhile, these defendants allegedly used the investor funds for their own purposes and spent the money lavishly.
The defendants might argue that there was in fact a real cryptocurrency investment that simply failed, as so many cryptocurrencies have. (Some reputable economists might even argue that the entire cryptocurrency industry is, at base, a Ponzi scheme in and of itself.) Prosecutors will use bank records and other evidence to show that these investor accounts ran dry because they were emptied by the defendants.
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