Man Charged by DOJ, SEC Over Alleged $3 Billion Fake Napster Investment

U.S. federal authorities have brought charges against Charles Cole, a 57-year-old North Carolina man, for allegedly conning a company that later became Napster out of a substantial ownership stake. The Department of Justice (DOJ) unsealed an indictment on Thursday, charging Cole with three counts of criminal fraud and conspiracy. Concurrently, the Securities and Exchange Commission (SEC) filed civil fraud claims against Cole, additionally naming his attorney, Torben Welch, as a defendant.

Cole is accused of obtaining 239 million shares of Infinite Reality, which constituted approximately 25% of its total shares, by falsely claiming access to $55 billion in cash and promising to invest more than $3 billion. These shares were reportedly acquired over the course of 2024. Infinite Reality later acquired the streaming service Napster for $207 million in March 2025 and subsequently rebranded under the Napster name.

Authorities allege that Cole never delivered the promised funds. To deceive the company, he purportedly created a complex "fictitious paper trail," including forged bank statements and a fake website designed to mimic a real Malaysian bank, set up with offshore servers.

According to the SEC complaint, Cole, with Welch's alleged assistance, utilized the fraudulently obtained shares in Infinite Reality to secure a $1 million loan from a private third-party lender, which he reportedly never repaid.

Napster has stated its cooperation with law enforcement since it initially reported being a victim of misconduct and continues to support the investigation. Cole and Welch could not be reached for comment on Thursday.

According to Billboard, a Forbes investigation previously raised questions regarding the identity of the company's $3 billion backer following the Napster acquisition.