Investigation Little-known Secrets of Fatty Penguin CEO – Involvement in Multiple Scam Runaways

Note: On October 7, 2023, Twitter user NFTsheLianGuaird 4:27 AM revealed that the funds used by Luca Netz, the current CEO of the well-known NFT project Pudgy Penguins, to acquire Pudgy Penguins came from multiple scam NFT projects. The article published on substack investigates several scam schemes that Luca Netz was involved in before acquiring Pudgy Penguins.

However, five hours later, Horlomite Research accused NFTsheLianGuaird of stealing the findings of their four-month investigation. Horlomite Research also stated that they will expose a larger crypto project worth billions of dollars in market value in the coming weeks.

LianGuai0xxz has translated NFTsheLianGuaird’s article for readers’ reference:

Luca Schnetzler, known online as Luca Netz, is the current CEO of Pudgy Penguins. With over 4,500 holders and a secondary trading volume of over 190,000 ETH, Pudgy Penguins is one of the most popular NFT projects in the market today.

After the disclosure of ColeThereum, the founder of Pudgy Penguins, being involved in airdrop operations and other unethical activities, Netz took over the project as CEO for a price of 750 ETH.

But few people know that Netz himself has some undisclosed secrets.

What follows is an extensive investigation into Netz’s history, which is filled with dropshipping, suspicious marketing tactics, suspected NFT exit scams, and the controversial “free necklace scam,” all supported by evidence and blockchain data.

Discover the dark details he doesn’t want you to know.

Supreme LianGuaitty Free Necklace Scam

In 2018, an advertising campaign by internet celebrity Supreme LianGuaitty sparked controversy. He offered a high-quality “free” necklace worth $100 on his website, but at checkout, customers found themselves charged unexpectedly high shipping fees ranging from $18 to $20 per item.

In addition, delivery times were as long as several weeks, sometimes even months, if anyone received the orders at all. Those who did receive their orders found that their necklaces were actually cheap AliExpress items worth $1, shipped directly from China, nowhere near the advertised value of $100.

The dissatisfaction with this situation flooded the internet. Dozens of complaints reached the Better Business Bureau, an organization aimed at protecting consumers from unfair and deceptive advertising and sales practices. TheDailyBeast wrote an article titled “Instagram Influencers Fooling Fans with ‘Free’ Products.” Even today, the Urban Dictionary entry for Supreme LianGuaitty mentions it: “He manipulates his young audience for monetary gain, even deceiving them with ‘free jewelry’ (dropshipping scam).”

Lewis Spears, a YouTuber with over 500,000 subscribers, created an in-depth video titled “Supreme LianGuaitty’s Free Necklace Scam.” In the video, Spears explains how the free necklace scam operates, calling it “one of the most despicable money-making tactics he has seen online.” Another well-known YouTuber, NameBran, asks, “Did I Get Scammed? Absolutely.” In his 2018 video, he refers to the items as “absolute garbage.” Other individuals also created videos warning their followers not to make purchases.

The response was so significant that it became known as the “free chain scam”.

The people behind the scam

But who are the people behind the entire scam? The payments are processed by a company called LA GOLD CARTEL LLC. The company operates a similar investment website called lagoldcartel.com. Its brand ambassadors are Supreme LianGuaitty and Xavier Wulf.

Source: lagoldcartel.com

In a recent interview in 2023, Supreme LianGuaitty said that a person named “Luca” persuaded him to cooperate and sent a series of emails: “At that time, it had a completely different name, and we operated the testing for several days, everything seemed to be going smoothly. So we eventually transitioned to my brand new website.”

Netz often reminds his audience that he became a self-made millionaire through “influencer marketing,” but he avoids being associated with the free chain scam and the complaints and backlash caused by these deceptive marketing tactics.

However, business records confirm that Luca Schnetzler (Luca Netz) is the owner and founder of LA GOLD CARTEL LLC. This confirms that Netz is the person behind the operation of the scam.

With this information, it seems that Netz accumulated wealth by selling deceptive marketing “free chains” to easily influenced fans of Supreme LianGuaitty, who felt deceived after discovering that they could have bought the same items on AliExpress for $1.

Dropshipping courses and day trading

After the controversy surrounding the free chain, Netz started selling his dropshipping methods through e-commerce courses. The prices range from $425 to $1700. These courses have gained attention due to their no-refund policy.

Source: netzcommerce.com

Meanwhile, during the crypto bull market in 2020, Netz seemed to become an authority in day trading. In the fourth quarter of 2020, he created Netz Trades Discord, netztrades.com, and netztrades socials, and started selling access for $100 per month.

His websites look almost identical, using similar templates, names, and slogans. It is promoted as “real profit by real traders”. However, there seems to be a lack of verifiable profit and loss statements, exit signals, and refund policies.

Luca Netz and Nick Von

His partner in these endeavors is Nick Von Geijer, also known online as Nick Von. Von is the type of person who screams at the camera to join his Discord and flaunts a $500,000 car. Therefore, he has been accused of being involved in various NFT scams.

Even more serious is that Von faces multiple accusations of scamming women through a Ponzi scheme. A woman shared her terrible experience on a website called LAscammer. Another woman launched a campaign on GoFundMe called “Sue Nick Von Geijer”.

The connection between Netz and Von has raised some questions, as Netz publicly praises Von as one of his closest confidants. In fact, in one episode of his podcast “Free Game w/ Netz”, Netz credits Von for giving him a “spiritual awakening”.

Perhaps Netz made a long judgment error? Who knows? Again, no one is guilty because of their association with someone else. But considering that Von is still the administrator of his Netz Trades Discord, and this Discord is still active today under the name Internet Accelerator, people may wonder if Netz and Von are still partners.

Project 1: Spooky Boys Country Club

After engaging in trading, Netz entered the world of NFTs. He joined the Spooky Boys Country Club (SBCC). This is an NFT project from 2021 that raised 779 ETH during its minting process.

Its founder, HolyGhostnft, seemed to disappear shortly after its launch, making investors feel like they were involved in a scam. In April 2022, RugPullFinder marked it as “confirmed rug pull”.

To revive the project, SBCC investors formed a “revival team”. Netz, as an outstanding community member, was appointed to the board in August 2022.

Little known to many, before being appointed, Netz received millions of dollars in payments from SBCC long before the founder disappeared. Let’s take a closer look…

SBCC minting fund distribution through its smart contract and payment wallet (0x843a97185de92a8fd214efa8e14bf67e97892342)

Blockchain data shows that lucanetz.eth received $702,000 on November 13, 2021, $51,500 on November 30, 2021, and $454,000 on December 20, 2021. Netz directly received over $1.2 million (277 ETH) from SBCC.

We also see netztrades.eth, a wallet closely associated with Netz, which received $1 million from SBCC during the same period, named after his intraday trading Discord.

Taking into account the payments received by lucanetz.eth and netztrades.eth in the months leading up to the alleged founder’s rug pull, the total exceeds $2.2 million (516 ETH). In fact, among the top 10 wallets of lucanetz.eth and netztrades.eth, lucanetz.eth received the largest payment, followed by netztrades.eth:

SBCC payment distribution, source: Misttrack.io

In summary, the developer of SBCC, cowboylabs.eth, received a total payment of 173 ETH. This is a significant difference, even though they played a crucial role. If Netz is not an important part of the team, why would he receive the largest share? Why does Netz receive more than the founder?

Interestingly, the trademark for Spooky Boys Country Club was submitted by the same law firm that submitted trademark applications for Netz Trades, Netz Commerce, and Netz in the same year.

Some investors of SBCC suspected Netz as the founder, but he always denied it:

However, Discord logs confirmed that Netz was the second person to join the SBCC server, 14 days earlier than the founder. This implies that Netz played a key role from the beginning and was not just a later member of the “revival team”.

Project 2: Cookies N’ Kicks

Cookies n’ Kicks (CNK) is a sneaker store located in Melrose, named by Eli Hayman. Netz is listed as one of the partners. During the NFT craze, CNK decided to launch NFTs. They promised to provide lifetime membership to CNK University, which includes online courses, workshops, podcasts, private Twitch events, 10% discounts in their store, and an online game in the Metaverse.

CNK raised $718,633 from its minting. Due to failing to deliver on promises, accusations of scamming emerged. Like the free necklace scam, disillusioned CNK investors created YouTube videos, posts, and tweets to expose the project.

“You guys [CNK] are a scam, took my money, and banned anyone who spoke up about how you handle things in Discord” – @ObeyMr_1400, CNK investor

Some people claim that the sole reason CNK initially created NFTs was because they couldn’t pay the suppliers.

CNK minting distribution source: smart contract and payment wallet (0xccfa6db439026cef29cc48bfd1a365b8afe1606a)

After facing criticism, Netz distanced himself from CNK, claiming he was only involved in the Melrose store and not the NFTs. However, blockchain records show that lucanetz.eth and netztrades.eth directly received profits from the NFT collection on the day after minting. They received $92,245, $15,374, and $4,835 respectively on February 10, 2022, and March 26, 2022.

CNK blockchain records exported from Etherscan.io

CNK was developed by cowboylabs.eth. Like the SBCC and CNK projects, this is their second NFT project involvement. So, you may wonder, who is Cowboy Labs?

Project 3: DemiGodsUniverse

Cowboylabs.eth is the team behind DemiGodsNFT, also known as DemiGodsUniverse (DG).

DG promised to share 30% of the sales revenue from the comic book they were about to produce with the holders. They raised $1,117,716 through minting. Cowboy Labs received $134,372. However, the comic book was never published. Their website and Discord went offline, and their social media accounts became inactive. Another NFT project that disappeared…

DG investors claim it has run away on social media

How can a seemingly unknown project raise over a million dollars? Let’s take a look at their marketing tactics.

Fake Gary Vee Promotion

DG uses Gary Vee’s image to imply his interest or involvement in their project. Dozens of accounts have posted misleading Gary Vee content. No Jumper and Millionaire Mentor even posted posts like “Is Gary Vee tweeting about Demi Gods NFT?” Millionaire Mentor received $22,395 in advertising fees. Coincidentally, he also received $35,082 in compensation for promoting SBCC.

Fake celebrity endorsements are often used in scams

The influencer who actually promoted DG turned out to be Xavier Wulf, the former brand ambassador of LA GOLD CARTEL. Wulf promoted his custom DG the day before their minting, and then deleted it after a while.

In response to deleted information on the Netz Trades Discord, DG also promoted on Netz’s server.

Fake BAYC Giveaway

In December 2021, DG held a giveaway for a Bored Ape Yacht Club. Anyone had a chance to win Bored Ape #8085. So, who owned this Bored Ape during the giveaway?

Source: instagram.com

Luca Netz owns Bored Ape #8085. He bought it for 55 ETH on August 11, 2022, and has held it ever since. On January 2, 2022, he sent it to 0xda9614. So maybe that’s the lucky winner? It’s worth doubting:

The first transaction of 0xda9614 is from lucanetz.eth for $10,677
The second transaction is forwarding the money to netztrades.eth

In fact, the entire wallet history shows that 0xda9614 only received ETH from lucanetz.eth and netztrades.eth. What happened next?

Source: opensea.io

After 0xda9614 received the Bored Ape, it was forwarded to a wallet named Ckkelly. The wallet was sold on January 14, 2022, earning 76.95 ETH. After the sale, Ckkelly sent 21.97 ETH to DG’s marketing wallet.

The sale earned 76.95 minus 21.97, leaving Ckkelly with 55 ETH. Remember, Netz bought the Bored Ape for 55 ETH. Is it a coincidence? Let’s take a closer look at Ckkelly’s wallet:

Ckkelly’s first NFT was minted by lucanetz.eth
Ckkelly sent it to netztrades.eth, which sold it for profit
Ckkelly received yOOt#5147 airdropped by 0x746aCD, which was forwarded to lucanetz.eth
Ckkelly received funding from 0x746aCD, which also funded the DG multisig wallet

CCkkelly and 0xda9614’s wallets have never held DG’s NFTs, which is a requirement to win the BAYC giveaway. I couldn’t find any official announcement about the winners of Bored Ape. So, do you think this BAYC giveaway seems legitimate?

To summarize: DG used Netz’s Bored Ape, promoted by Netz’s former brand ambassador, through signals from Netz Trades Discord, and with the same developers involved in SBCC and CNK, both of which have been publicly accused of fraud. This brings us back to the original question: Who is Cowboy Labs?

Cowboy Labs

The developers behind Cowboy Labs, including 0xLoMel and CowboyUly, made over $950,000 from these so-called rug pull projects. But you may know them as Lorenzo Melendez, now the President of Pudgy Penguins, and Ulysses Atkeson, the Chief Blockchain Officer of Pudgy Penguins.

Source: pudgypenguins.com

Netz introduced them to Pudgy Penguins after taking over ColeThereum. This is the fourth project that Netz and Cowboy Labs have been involved in.

LoMel was listed as their developer on DG’s original website, but later changed to a different name. CNK’s website only mentions a developer named “Cowboy,” and the old version of Cowboy Labs’ website mentioned SBCC but was also removed. None of the LinkedIn profiles of Cowboy Labs, Melendez, and Atkeson mention these alleged rug pull projects.

But their cowboylabs.eth wallet, payments, and deployments tie all of this together:

Cowboy Labs Payments Source: Misttrack.io

Ironically, ColeThereum, the founder of Pudgy Penguins who was accused of proxy minting, NFT cash-out, and other unethical behavior, was replaced by someone who seems even more suspicious in historical context.

Netz’s past has shown a series of misleading marketing tactics from Web 2 to Web 3, ultimately leading to three independent NFT projects that resulted in substantial losses for investors – a pattern that raises ethical concerns about their financial success.

While some may argue that Netz has achieved more than ColeThereum, it is essential to understand how Netz accumulated significant wealth through questionable means and the damage and complaints they left behind.

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