This article was produced and reported in collaboration with Court Watch, an independent outlet that unearths overlooked court records.
A man was arrested for allegedly perpetrating a comically absurd cryptocurrency scam in which he convinced a series of investors to send him at least $1.5 million to build a bot that he essentially pitched as a zero risk, magic money making machine that would make investors instantly wealthy. The man seemingly never built this bot and instead spent much of this money on buying season tickets in a suite for the Denver Broncos, a new Jeep, and with a company called Atlantis Paradise Vacation, which runs the Paradise Island resort in the Bahamas.
According to an FBI affidavit, a man named Robert Robb, who once spent two years in prison for defrauding millions of dollars from investors “by falsely stating Las Vegas-based casinos would be using his prototype gambling machine,” convinced a series of crypto investors to give him money to build a “Maximum Extractable Value cryptocurrency trading bot.” An MEV bot is an arbitrage scheme in which a bot trades cryptocurrency for what is supposed to be a guaranteed gain by exploiting inefficiencies in a crypto blockchain. There are examples of MEV bots working for a short period of time, but there is no indication in the affidavit that Robb’s would have worked or that he ever actually built anything.
Robb suggested that his bot would analyze human trading behavior and would “predict what they are going to buy, sell, when, the gas price at which they will do it, and in what amounts. Even though we cannot see their transactions, we can still profit from them. We can back run them, hijack any backruns from the platform itself … we will be the only people doing it, because nobody else will know the transaction will exist.”
One message Robb allegedly sent to a Telegram group read “Poof, YOU’RE A MILLIONAIRE. After we launch…Feel like this might be the case for some of you.” The message added that investors could become millionaires through a combination of the MEV bot, investment in a cryptocurrency called $RAT, and a token called “NoRugz,” which refers to the common cryptocurrency rug-pulling scam where a business or scammer disappears with people’s money.
In September, Robb told people on the crypto-centric social media platform Friend.Tech and on Twitter that people who “have $100-$200k+ sitting around” could take advantage of “some next-level MEV stuff” via a new bot he was building, according to messages included in the affidavit. Robb explained to investors in DMs that what he was apparently building was “quite capital intensive” but that he had already built a prototype that is “theoretically good enough already to make enormous returns.”
Over the course of the next few weeks, Robb allegedly collected a series of investments totaling at least $1.5 million and continued to give investors optimistic-sounding updates that claimed their “risk free” investment would result in a “six figure return” within a week of the bot’s launch.
Rather than actually build any sort of bot, however, the FBI alleges that Robb transferred much of this investment to his personal bank accounts, which he then used to buy sports tickets, a luxury Jeep, and a Bahamas vacation.
“ROBB sent a wire totaling $204,423 to Stadium Management Company, a management company for Mile High Stadium and the Denver Broncos Football Club. A review of records provided by the Denver Broncos Football Club shows ROBB purchased a two-year lease for an executive suite at the Denver Broncos’ Mile High Stadium for the 2023 and 2024 National Football League seasons,” the affidavit reads. “ROBB wired $46,914.50 from his Bank of America account to Atlantis Paradise Vacation. Open-source research shows Atlantis Paradise is an ocean-themed vacation resort on Paradise Island in the Bahamas.”
When investors asked what was going on, Robb allegedly told them: “Not going into all the details given that you and your group are behind threats to my safety.”
Robb was arrested last week. The Denver Broncos and FBI declined to comment.
The catastrophic scale of Sam Bankman-Fried's FTX scam and the sheer number of other crypto scams over the last few years have desensitized the masses. And yet, every once in a while we see something like this and we must remember how absurd and wasteful all of this has been.
Jixu
