MacDill Airman Gets 5 Years Probation for ‘Undead Apes’ Blockchain Fraud

TAMPA — The images appeared two years ago on social media and in cryptocurrency-themed discussion forums. Colorful squares depicted skeletonized primates, some with flashy hairstyles, others with fire shooting from their eye sockets.

The captivating cartoon images were part of a pair of non-fungible token collections traded on the Solana blockchain. They were known as the “Undead Apes” and the “Undead Lady Apes”. Buzz about them pushed their resale value up to $360 and sparked excitement for a third collection, “Undead Tombstone.”

But it was a sham. In April of that year, hundreds of investors in the collections lost money in what federal prosecutors called a fraudulent “rug pull” scheme that defrauded investors and netted $135,000 to two blockchain developers.

On Wednesday, one of those developers, a U.S. Air Force staff sergeant at MacDill Air Force Base, avoided prison time for his role in the project.

U.S. District Judge William Jung sentenced Devin Rhoden to five years of probation, a testament to Rhoden’s substantial assistance to prosecutors.

Rhoden, 22, pleaded guilty earlier this year to conspiracy to commit wire fraud and money laundering. He testified last month at the trial of his co-defendant, Berman Jerry Nowlin, a friend he had known since childhood.

Nowlin, 21, of Alabama, was convicted of the same charge and is awaiting his sentencing date in January.

In court Wednesday, Assistant U.S. Attorney Carlton Gammons said Rhoden’s cooperation was key to securing Nowlin’s conviction and that investigators initially built a case against him in hopes he would turn. Rhoden has also helped federal prosecutors understand the complex workings of cryptocurrency, blockchains and non-fungible tokens. It’s a world, the prosecutor said, where fraud is rampant and identifying victims is difficult.

“It’s like the Wild West,” Gammons said.

Judge Jung expressed curiosity about the unusual nature of the fraud, comparing the non-fungible tokens to Pokémon cards and wanting to know how much real value they had. The prosecutor explained that their main appeal lies in their uniqueness and recoverability. Those who own them can sometimes access exclusive events and promotions.

The case began when an Air Force veteran reported to military investigators that he suspected Rhoden of being behind the fraud, according to court records.

The veteran, who was not named in court records, told the Air Force Office of Special Investigations that he was a member of a chat room on the messaging platform Discord called “Undead Apes Society.” . The chat room focused on the development of the Undead Apes blockchain.

Its developers used the pseudonyms “Denny” and “Deviinz”. They promoted the Undead Apes and Undead Lady Apes collections on Discord and the social media platform X, formerly known as Twitter.

Amid promises of high returns, sale prices for the collections by early April 2022 had reached the equivalent of hundreds of dollars.

The developers then announced to the Undead Apes Society that they would create a third collection of non-fungible tokens dubbed “Undead Tombstone,” according to information the veteran provided to investigators. They promised additional cryptocurrency earnings to those who already owned non-fungible tokens with certain characteristics if they purchased the new collections.

While the Undead Tombstone Collection was being created, “Denny” announced on X that the developers were collaborating with “Stoned Ape Crew”, described as a well-known and successful non-fungible token project.

According to federal investigators, this collaboration was a lie, intended to further increase the price of the Undead Tombstone collection.

Shortly after, the developers abandoned the creation of Undead Tombstone, causing prices to plummet.

“You’re all stupid like that,” Denny wrote to the Undead Apes Society. His Discord and X accounts are gone.

In total, the three collections earned Nowlin and Rhoden nearly $400,000, prosecutors said, while leaving investors with worthless assets.

Victims of the scheme then helped investigators associate the name “Deviinz” with the social media accounts. belonging to Rhoden. Investigators conducted a complex financial analysis, which traced the funds to an online program facilitating movement from one blockchain to another. The technique was described in court records as a form of money laundering known as “chain jumping.”

The funds were converted from Solana to the Ethereum blockchain, then split equally and deposited into two Coinbase wallets. One of the wallets belonged to Rhoden, according to court records, and was linked to his bank account. The other belonged to Nowlin.

A few weeks after the robbery, records showed Rhoden purchased a home in Pinellas Park for $305,000.

Investigators later discovered Discord chats between Rhoden and Nowlin in which they talked about the theft.

“I was able to put a down payment on a house,” Rhoden wrote in one exchange. “Buy my dream car. Have more than 6 months of expenses in savings.

“Rich,” Nowlin replied.

“Being able to renovate my house to increase its value,” Rhoden said. “And I still have money left.”

Rhoden’s attorney, Assistant Federal Defender Adam Allen, described his client’s conduct as a youthful mistake with far-reaching consequences. He remains the subject of a separate military disciplinary proceeding, during which he was expected to receive something other than an honorable discharge.

Rhoden swiveled slightly in his chair as he addressed the judge. He vowed to repay the money he had taken.

“I apologize to all the victims,” he said. “It was a stupid mistake, an error of judgment.”

The judge said he found Rhoden to be a good and truthful witness at Nowlin’s trial. In addition to probation, he ordered her to perform 500 hours of community service. He warned him to stay out of trouble.

“Even though I seem like a nice guy, you don’t want to see me again,” Jung told Rhoden. “If I see you again, bring your toothbrush.”