What happens when a gambling enthusiast gets their hands on over a million dollars in investments that they're supposed to pour into a project? Here’s a little hint: they blow it all.

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And, of course, 40-year-old Austin Michael Taylor couldn’t resist the temptation. On August 15th, he pleaded guilty to wire fraud for routinely using investor funds — intended for his project, CluCoin (CLU) — to fuel his online gambling habit.

This is a historic moment, folks, because it's the first time in history that the FBI is officially planning to use non-fungible tokens (NFTs) to recover $1.14 million for the victims caught up in this crypto scam. 

Background

Back in the distant year of 2021, Taylor, better known by his online alias DNPThree, used his massive social media following to drum up interest in a digital token he christened CLU. This crypto scheme was supposed to have a "charitable focus." 

After securing the funds, Taylor launched CLU through an Initial Coin Offering (ICO) on May 19, 2021. For the uninitiated, an ICO is basically a fundraising event where an organization offers investors a unique digital token in exchange for more established cryptocurrencies or fiat money. After launching CLU, Taylor shifted gears to releasing NFTs, developing new video games, and even hinted at launching a metaverse platform.

On April 4, 2022, he even hosted a conference called “NFTCon: Into the Metaverse” at a Miami hotel to stir up more interest in CluCoin and its side projects.

Following the event, Taylor began withdrawing funds from a crypto wallet that held some of the CLU investors' money. Between May and December 2022, he transferred a whopping $1.14 million of investor funds to his accounts on various crypto exchanges before funneling that money into online casinos.

Gambled Away

Despite his tearful looks, trusting eyes, and solemn promises to use the funds for charitable purposes, Taylor redirected the money for personal use, including feeding his gambling habit.

The prosecution explained:

From May 2022 to December 2022, Taylor transferred about $1.14 million of investor funds to his personal account on a virtual currency exchange and then used these funds at several online casinos, where he gambled away the investors’ money.

Taylor publicly apologized for his actions in January 2023, admitting that he was "incredibly addicted to gambling" and adding that he was "deeply sorry" for misusing the investors' funds.

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Source: Twitlonger

Justice will have its day on October 31 at 10:00 a.m., when Taylor is scheduled for sentencing before U.S. District Judge Jacqueline Becerra. Taylor faces a maximum statutory penalty of 20 years in prison for his wire fraud conviction. Judge Becerra will determine his sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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If this is the first time you’re hearing about this, and you vaguely recall investing in CLU a couple of years back, think you might be a victim, and/or received an NFT, visit the website to provide relevant information to the FBI.

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