US authorities have charged a North Carolina man with fraud, alleging that he used forged bank records and a fake banking website to obtain “hundreds of millions” of shares in Napster owner Infinite Reality without paying a cent.
An indictment unsealed on Thursday (June 11), which you can read here, charges Charles Cole, 57, of Mooresville, North Carolina, with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit securities fraud.
He also faces a parallel civil complaint from the US Securities and Exchange Commission (SEC), which charges him alongside his lawyer, Utah attorney Torben Welch, and three entities he controlled.
The case centers on Infinite Reality, the Florida-based technology company that acquired Napster in 2025 and later took on its name.
In mid-2024, the company was seeking to raise around $350 million, and a broker introduced it to Cole as someone who could help facilitate an investment, the indictment states.
Cole first proposed handing over a $1 billion bond in exchange for $350 million of stock, but his attempts to monetize it failed.
He then told the company he wanted to buy billions of dollars’ worth of shares directly, submitting documents that falsely claimed a $50 million annual income and an $800 million net worth, prosecutors allege.
To back the claim, Cole allegedly fabricated a letter on the letterhead of a bank in Sweden stating that an entity he controlled, Avranoc, LLC, held EUR €49 billion (approx. USD $57 billion) of “immediately spendable cash.”
Cole and Welch falsely told Infinite Reality that Cole or Avranoc controlled at least $55 billion in assets, the SEC alleges.
When payments failed to arrive, Cole allegedly told Infinite Reality that he held billions of dollars at a second bank, this one in Malaysia, and that he had opened an account there in the company’s name.
One fabricated letter claimed Cole was “Ready Willing and Able to fully fund the transfer of $3,360,000,000.00,” according to the indictment.
The account, however, was a fiction: Cole and a coconspirator had established offshore servers hosting a fake website that mirrored the real bank’s site, allowing users to “log in” to fabricated accounts, the indictment states.
Cole repeatedly asked a coconspirator whether the server hosting the “mirror” was “up and running so that we can add an account” and go “live,” according to the indictment.
Infinite Reality executives received a fake welcome email, logged in, and saw what looked like a funded account, prosecutors allege.
In all, Infinite Reality issued Cole and his entities at least 239 million shares, the indictment states.
“As alleged, Charles Cole built a fiction of wealth using fake bank records, sham correspondence, and a fraudulent bank website, then used that fiction to obtain hundreds of millions of shares with no intention of paying for them.”
Jay Clayton, US Attorney
“Fraud is fraud, whether in our public markets or our private markets,” said Jay Clayton, the US Attorney for the Southern District of New York.
“As alleged, Charles Cole built a fiction of wealth using fake bank records, sham correspondence, and a fraudulent bank website, then used that fiction to obtain hundreds of millions of shares with no intention of paying for them.”
“Mr. Cole allegedly defrauded an unsuspecting company through a series of lies and misrepresentations,” said Ketty Larco-Ward, the Inspector in Charge of the New York field office of the US Postal Inspection Service.
Cole never invested any money and instead used the shares as collateral to borrow from lenders, the indictment states.
In May 2025, a US lender loaned $1 million against nearly 45 million of the shares, with the proceeds passing through an account held by Cole‘s then-attorney before roughly $280,000 was withdrawn.
The SEC identifies that attorney as Welch and alleges that he secured the loan by providing forged documents to verify Cole‘s wealth and giving the lender false assurances.
Cole later tried to acquire still more shares through a tender offer, fabricating a screenshot of an $11 billion balance in an account that did not exist, prosecutors allege.
Cole even directed a coconspirator to fix mismatched formatting on the forged statements so they would “match all the others,” according to the indictment.
The scheme unraveled in March 2026, when Infinite Reality rescinded all the shares it had issued to Cole and his entities.
As MBW reported in March 2025, Infinite Reality acquired Napster in a $207 million deal, weeks after announcing what it described as a $3 billion funding round from an unnamed private investor.
That money never arrived, and prosecutors now allege the investor behind it – Cole – never had the funds he promised.
Napster launched in 1999 as a file-sharing service before being shut down following a wave of copyright lawsuits, and the brand has changed hands repeatedly as a licensed streaming service.
In 2011, it merged with the subscription platform Rhapsody and operated under the Rhapsody name in the US until rebranding to Napster again in 2016.
It was sold to virtual reality company MelodyVR in a $70 million deal in 2020, then to Hivemind Capital Partners and cryptocurrency firm Algorand in 2022, before the Infinite Reality acquisition in 2025.
The case has been assigned to US District Judge Vernon S. Broderick, with Cole presented in the Western District of North Carolina on Thursday.
The wire fraud and wire fraud conspiracy counts each carry a maximum sentence of 20 years in prison, while the securities fraud conspiracy count carries a maximum of five years, the DOJ said.
The full indictment also seeks the forfeiture of any proceeds Cole made from the alleged scheme.
The charges are allegations, and Cole is presumed innocent unless and until proven guilty.Music Business Worldwide
