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:
For cases involving the alleged theft of over $1.5 million dollars, the sentencing guidelines require that 16 levels be added, resulted in an offense level of 22.
Where there are more than 10 victims of a fraud scheme (or the scheme involves mass-marketing), the guidelines require an additional two offense levels, resulting in a level 24. USSG 2B1.1(b)(2).
There might be an additional two levels relating to the fact that the fraud occurred in a foreign jurisdiction (USSG 2B1.1(b)(10)), but that is unclear.
So, if Mr. Michel is convicted at trial, assuming he has no criminal history (i.e. Criminal History Category I), his sentencing guidelines range would be 51-63 months, or about 4-5 years in prison. Judges use a Sentencing Table promulgated by the Sentencing Commission – see here.
If he pleaded guilty prior to trial, Mr. Michel would likely receive a reduction of 3 levels for acceptance of responsibility, resulting in an offense level of 21 and a range of 37-46 months (3-4 years).
However, there is no mandatory minimum sentence in this case, meaning that he could theoretically be convicted and receive a sentence of time served followed by supervised release.
Mr. Michel would likely be ordered to pay restitution to his victims equal to the amount of their losses, and, if he is not a citizen of the United States, then he would be almost certainly deported following his prison sentence and unable to ever return to the United States (inadmissible).
Matthew Galluzzo is an experienced criminal defense attorney and former Manhattan prosecutor. He specializes in the defense of federal criminal cases in New York City. He also speaks fluent French and has been knighted by the nation of France for his zealous defense of French nationals accused of crimes in the United States and his service to the French Consulate of New York City.
If you or a loved one have been arrested or accused of a federal crime involving wire fraud charges, you should strongly consider contacting Matthew Galluzzo. He has achieved excellent results for many clients accused of these crimes in New York City federal courts and may be able to assist you as well.