Feds Charge Fake Billionaire Over Fraudulent $3 Billion Investment Scheme Involving Napster
Federal authorities in New York unsealed a criminal indictment charging Charles Cole, 57, with orchestrating an elaborate corporate fraud scheme involving a completely fabricated $3.3 billion investment proposal.
Federal prosecutors and the SEC allege that Cole created a elaborate fiction of immense wealth to fraudulently acquire more than 239 million shares of Infinite Reality, a digital media and technology firm that acquired Napster and later adopted its corporate name.
According to investigators, Cole was introduced to Infinite Reality leadership as a prominent broker capable of facilitating a critical $350 million capital raise.
Instead, Cole allegedly leveraged fake bank statements, forged correspondence, and even constructed a fraudulent mirror website of a major Malaysian financial institution to trick executives into believing he personally controlled billions in capital.
Duped by the sophisticated ruse, the company entered into subscription agreements and issued hundreds of millions of corporate shares to Cole, who never actually deposited a single dollar of the promised funding.
Rather than funding the tech company, prosecutors state Cole used the illicitly obtained shares as collateral to secure multiple cash loans from third-party lenders for personal enrichment. The massive unfulfilled funding round forced the company to ultimately rescind the agreements when the capital failed to materialize.
Cole faces multiple federal criminal charges, including wire fraud, conspiracy to commit wire fraud, and conspiracy to commit securities fraud, carrying a maximum potential penalty of up to 20 years in prison if convicted.
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