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French developer Aurélien Michel pleads guilty to conspiring to commit wire fraud.

On November 14, 2023, French footballer Aurélien Michel appeared in federal court before the United States Magistrate Judge Vera M. Scanlon and pleaded guilty to conspiring to commit wire fraud.

Aurélien Michel was initially arrested on January 4, 2023, 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 orchestrator 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.

Eight months later, Aurélien Michel pleaded guilty and acknowledged his role in the NFT fraud scheme. Notably, however, the prosecutors only required him to plead guilty to conspiring to commit wire fraud[1], meaning that some of the most serious potential charges were dropped.

As stated by the government at the plea guilty hearing, the elements of that charge are :

  • That two or more persons entered into an unlawful agreement as charged in the Information;
  • That the defendant knowingly and willfully became a member of the conspiracy;
  • That one of the members of the conspiracy committed an overt act in furtherance of the conspiracy.

That charge includes a maximum term of imprisonment of five years and a minimum term of imprisonment of zero years. A maximum fine of the greater of $250,000 or twice the gross gain or twice the gross loss may be imposed and restitution is mandatory in the full amount of each victim’s losses to be determined by the Court.

Other penalties include possible removal from the United States and a maximum supervised release term of three years. Mr. Michel may also be unable to return to the United States in the future.

In Mr. Michel’s case, the United States Sentencing Guidelines suggest a term of imprisonment between 37 to 46 months.

However, those Sentencing Guidelines are not binding upon the Court. Therefore, it is possible that Aurélien Michel will be sentenced for more than 46 months, up to five years.

During his plea hearing, Aurélien Michel explained how he managed to put in place a “rug pull” fraud scheme. Between September 2021 and September 2022, he and others developed, marketed, and sold a collection of NFTs called Mutant Ape Planet, MAP. As part of that marketing, he created a website for MAP, M-A-P, and on the website, knowingly and intentionally promised six benefits to purchasers of the MAP NFTs.

After the issuance of the MAP NFTs, he and others agreed to withdraw their profits from the MAP project. Subsequently they agreed not to fulfill all six of the promised benefits.

However, they willfully agreed that the MAP website, MAP social media account, and statements made through MAP’s public Discord chat would indicate to purchasers that the MAP project was live and well and that the remaining  benefits would be forthcoming.

Eventually, transfer of ownership was transferred of the MAP project to an unrelated third party without distributing the remaining three promised benefits to purchasers. At least one of the purchasers of MAP NFTs was located within this district, conferring jurisdiction upon the New York federal court.

The benefits promised by the conspiracy were 1) to carry out these game contests on social media accounts, 2) to spend $500,000 on marketing before the sale, and 3) to launch a merchandising collection and to create a MAP token.

In sum, Aurélien Michel is facing up to five years in prison. He agreed to pay $1.4 million in forfeiture. His sentencing date is May 15, 2024.

The case is USA v. Michel, 1:23-mj-00007, US District Court for the Eastern District of New York (Brooklyn).

Matthew Galluzzo is a federal criminal defense attorney and former Manhattan prosecutor. He speaks fluent French and is a Chevalier in the French National Order of Merit. This article was prepared with the assistance of Marie-Lou Serna, a French trainee lawyer.

 

[1] 18 U.S.C  section 371

 

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