Federal prosecutors say Charles Cole used fake bank records and a fraudulent website to convince Napster's parent company he had billions to invest
United States Department of Justice building seen in Washington D.C., United States on December 19, 2025. (Celal Gunes/Anadolu via Getty Images)
Charles Cole, a 57-year-old Mooresville, North Carolina man, was indicted on wire fraud and securities fraud charges for allegedly obtaining 239 million shares of Infinite Reality, now known as Napster, by fabricating evidence that he controlled billions of dollars he never had.
The indictment, unsealed Thursday in the Southern District of New York, charges Cole with one count of wire fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit securities fraud. The charges carry maximum sentences of 20 years, 20 years, and five years in prison, respectively, the U.S. Attorney's Office said.
Prosecutors allege that between June 2024 and March 2026, Cole and others acting at his direction repeatedly lied to Infinite Reality about his ability to pay for the stock. According to the indictment, Cole fabricated bank records, created fraudulent correspondence, and built a fake website designed to mirror that of a foreign bank, convincing Infinite Reality he had billions of dollars ready to invest. The company issued the shares to Cole and entities he controlled, but Cole never provided any funds.
The U.S. Securities and Exchange Commission filed a parallel civil complaint on Thursday against Cole, his attorney Torben M. Welch, and three entities controlled by Cole: Beacon Heart, LLC, Heart of Humanity, LLC, and Avranoc, LLC. According to the SEC's complaint, Cole falsely promised to invest $3.36 billion in Infinite Reality and, together with Welch, told the company that Cole and Avranoc controlled at least $55 billion in assets. Infinite Reality issued the shares in late 2024 and early 2025 but received no money.
After obtaining the stock, Cole and Welch pledged nearly 45 million of those shares as collateral to secure a $1 million loan from a third-party lender, which Cole never repaid, the SEC said. Welch allegedly provided forged documents and made false assurances to the lender in connection with the loan.
Infinite Reality ultimately rescinded the shares it had issued to Cole and his entities, according to the indictment.
"Fraud is fraud, whether in our public markets or our private markets," U.S. Attorney Jay Clayton said in a statement. "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."
In a statement to Billboard, Napster said it had been engaged with law enforcement from the outset, after initially coming forward as a victim of misconduct, and that its support for the ongoing process remains active.
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