{"id":10942,"date":"2026-06-12T11:36:12","date_gmt":"2026-06-12T11:36:12","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/doj-and-sec-fraud-charges\/"},"modified":"2026-06-12T11:36:12","modified_gmt":"2026-06-12T11:36:12","slug":"doj-and-sec-fraud-charges","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/doj-and-sec-fraud-charges\/","title":{"rendered":"DOJ and SEC Fraud Charges"},"content":{"rendered":"\n
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\n\tU.S. authorities have accused a North Carolina man of conning Napster out of a massive ownership stake by falsely pledging $3.36 billion he never had.<\/p>\n

\n\tAn indictment by the Department of Justice (DOJ), unsealed on Thursday (June 11) and obtained by Billboard<\/em>, charges 57-year-old Charles Cole<\/strong> with three criminal fraud and conspiracy counts. Cole also faces parallel civil fraud claims a Thursday complaint from the Securities and Exchange Commission (SEC), which also names his attorney, Torben Welch<\/strong>, as a defendant.<\/p>\n

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\n\tOver the course of 2024, Cole obtained 239 million shares of the digital media company Infinite Reality \u2014 roughly 25% of its total shares \u2014 by claiming he had access to $55 billion in cash, and promised to invest more than $3 billion in the company. Infinite Reality later rebranded to Napster after acquiring the streamer for $207 million in March 2025.<\/p>\n

\n\tIn the wake of the Napster acquisition, a Forbes <\/a><\/em>investigation<\/a> raised questions about the mysterious identity of the company\u2019s $3 billion backer. The following November, Napster\u2019s CEO reportedly told shareholders<\/a> that the investment was not going to come through, saying the company had been the \u201cvictim of misconduct\u201d and was cooperating with law enforcement to nail the fraudster.<\/p>\n

\n\tNow, federal authorities claim that Cole never gave a penny to Napster and didn\u2019t actually have the funds to do so. Cole allegedly duped Napster into believing he did have the money by creating a complex \u201cfictitious paper trail\u201d that included forged bank statements and a fake website, set up with offshore servers, to mirror a Malaysian bank\u2019s real site.<\/p>\n

\n\t\u201cCole, with Welch\u2019s assistance, then used the fraudulently obtained shares in Infinite Reality to secure a $1 million loan from a private third-party lender that he never repaid,\u201d reads the SEC complaint.<\/p>\n

\n\tIn a statement shared with Billboard, <\/em>a Napster spokesperson said, \u201cWe have cooperated with law enforcement since the company initially reported it was the victim of misconduct. We are continuing to support this process. Questions about the proceedings should be directed to the U.S. Attorney for the Southern District of New York. We have no further comment on an active matter.\u201d<\/p>\n

\n\tCole and Welch could not immediately be reached for comment on Thursday.<\/p>\n

\n\tNapster\u2019s origins infamously date back to 1999, when it shook the music industry by launching as a file-sharing site that allowed users to download tracks for free. The name later got recycled as a licensed streaming service that has changed hands a number of times over the years.<\/p>\n

\n\tNapster was sold to the streamer Rhapsody in 2011, then to virtual reality concert app MelodyVR in 2020 and again to Hivemind Capital Partners and cryptocurrency company Algorand in 2022. This was followed in 2025 by the Infinite Reality acquisition, which promised to \u201ctransform Napster into a next-generation platform\u201d using \u201cimmersive 3D technology.\u201d<\/p>\n

\n\tThis story was updated at 10:18 p.m. ET to add a statement from Napster.<\/em><\/p>\n


\"Billboard
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