Texas resident Robert Dunlap has been arrested on federal mail fraud charges in connection with the Meta-1 Coin scam that saw investors drained of over $10 million, a Tuesday press release from the Department of Justice (DOJ) reveals.

The Meta-1 Coin Scam: A Masterclass in Digital Asset Fraud

According to the DOJ’s complaint, Dunlap developed a digital asset entitled Meta-1 Coin in 2018 which he claimed was backed by over $44 billion in gold and art, with pieces by “Pablo Picasso, Vincent Van Gogh, Salvador Dali,  and other acclaimed artists.”

Texas Man Charged With Orchestrating Digital Currency Scam That Bilked Investors out of More Than $10 Million @FBIChicago @IRSCI_CHI @Chicago_SEC @EDVAnews https://t.co/CuXJLGkUBZ

— U.S. Attorney’s Office (NDIL) (@NDILnews) March 19, 2024

In reality, the purported fraudster failed to purchase any such artwork. Additionally, board members for the Meta-1 Coin Trust told officials Dunlap claimed to be “in possession of billions of dollars of gold” despite lacking “any proof that he or Meta1 Coin Trust purchased, owned, or possessed any gold assets of any kind.”

Authorities allege the Meta-1 Coin creator fraudulently generated “numerous legal, insurance, and other documents in an effort to conceal the fact that he did not possess the gold or art,” including a surety bond he claimed was backed by the U.S. Treasury.

“The loss of any art piece due to any reason will not affect the value of coin for long because the new art of equal amount can be acquired by filing a claim on the Surety Bond and then purchasing an art piece of the same amount,” the Meta-1 Coin’s White Paper read in part.

Meta-1 Coin Scam Exchange Used Bots To Appear Legitimate

Dunlap even went so far as creating an exchange for the cryptocurrency utilizing “decentralized exchange bots” in order to  “create the false appearance of an active market on the exchange website.”

These bots would “place bids/asks and the scripts, using multiple accounts, to periodically conduct actual trades with each other, when, in fact, no real user was on either side of those trades.”

The complaint notes that victims of the scheme were given instructions on how to send checks via mail to Chicago in order to secure their investment.

Dunlap Facing Decades in Prison, DOJ Says

According to blockchain intelligence firm Chainalysis, ​​“scamming is most successful when markets are up, exuberance is high, and people feel like they are missing out on an opportunity to get rich quickly.”

Current statistics on crypto scams are conflicting, with the FBI alleging that digital asset fraud schemes have been increasing year over year through 2022, while Chainalysis notes a major decrease in 2024.

Dunlap is facing four counts of mail fraud for the digital asset scheme, with each charge carrying a maximum sentence of two decades in federal prison.