Man charged with fraud over “fake” $3 billion investment into Napster
The alleged fraudster is accused of forging bank records to obtain shares in the music sharing network
A 57-year-old man has been charged with fraud after allegedly faking $3 billion worth of investments into the peer-to-peer music sharing network Napster.
Charles Cole from North Carolina is accused of forging bank records to "fraudulently obtain" some 239 million shares in Infinite Reality, who acquired Napster last year, between 2024 and 2026.
The U.S. District Court for the Southern District of New York has charged Cole with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit securities fraud, per Music Business Worldwide (MBW).
In an indictment unsealed on Thursday (June 11) and since released by MBW, the Grand Jury argues that Cole used his shares as "collateral to induce financial institutions to lend him money".
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"[Cole] repeatedly lied to Infinite Reality about his ability to pay for the shares, fabricating bank records, creating sham correspondence, and establishing a fake website to mirror that of a foreign bank," the Grand Jury alleges.
The indictment accuses Cole of "deceiving Infinite Reality into believing that he had billions of dollars that he was prepared to invest in the company," and tricking the tech company into issuing him shares and "entities he controlled".
"[He] persisted in his efforts to deceive Infinite Reality until it ultimately rescinded the shares it had issued to Cole and his entities," reads the indictment.
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It also alleges that when payments did not reach Infinite Reality, Cole claimed to hold billions of dollars in a second bank account in Malaysia under the company’s name.
"Unbeknownst to Infinite Reality, [Cole] and his coconspirator had established offshore servers to host a fake website that mirrored the actual website of Foreign Bank-2 and permitted users with approved credentials to "log in" to fabricated accounts," it alleges.
According to the Department of Justice, counts of wire fraud and conspiracy to commit wire fraud carry a maximum sentence of 20 years in jail, while conspiracy to commit securities fraud carries a five-year maximum sentence.
Read the indictment here.
Gemma Ross is Mixmag's Associate Digital Editor