A federal jury in Tampa, Florida, on October 31 found Berman Jerry Nowlin, aka “Repulse” and “Zayous,” guilty of digital fraud and money laundering. His accomplice, Devin Alan Rhoden, aka “Denny” and “Deviinz,” had already pleaded guilty in May 2024. Nowlin, aged 21, faces up to five years in prison and will be sentenced in January 2025.
The two developers used the Solana and Ethereum blockchains to launch and promote NFT collections: “Undead Ape” and “Undead Lady Apes” very close to the famous monkeys from Bored Ape Yacht Club. But this is not what the duo is accused of. Nowlin developed NFTs while Rhoden marketed them on Discord and X (formerly Twitter). Initially sold for the equivalent of $5, some NFTs have traded for up to $360.
In April 2022, the duo announced a new collection called “Undead Tombstone”, accompanied by false promises about the value of this new series. Once the 632 NFTs sold for around $135,000, Nowlin and Rhoden disappeared, deleting their accounts and leaving the investors with no recourse. A scam called “rug pull” in the United States (“Pulling the rug”)
To hide their winnings, Nowlin transferred the funds from the Solana blockchain to Ethereum via Tornado Cash, a technique used to make traceability more complex. The funds were then converted into dollars and transferred to his bank account. The three series of NFTs allowed the two accomplices to raise nearly $400,000.
This case highlights the vulnerability of investments in cryptocurrencies and NFTs. An investigation thus revealed the role of actor Kev Adams, accused of having taken part in an NFT scam to finance an animated film in May 2022 which resulted in around 1 million euros of loss for investors. Recently, ex-footballer Aurélien Michel was sentenced in November 2024 by the American courts for a “rug pull” scam involving $2.9 million in cryptocurrency, reports West France. According to a study carried out in September 2023, 95% of NFTs would no longer have almost any value.
