A man has been charged with fraud over a $3 billion funding round that was supposed to back Infinite Reality, the parent company of Napster, after the firm claimed it was a victim of misconduct. Charles Cole faces wire fraud, conspiracy to commit wire fraud, and conspiracy to commit securities fraud charges, according to the US Attorney’s Office for the Southern District of New York.
In November 2025, Infinite Reality said it had been the “victim of misconduct” when the $3 billion investment disappeared. Authorities have now taken up that claim.
“From June 2024 through March 2026, Cole perpetrated a scheme to fraudulently obtain at least 239 million shares from Infinite Reality, now known as Napster. As part of that scheme, Cole, and others acting at his direction, repeatedly lied to Infinite Reality about his ability to pay for the shares, fabricating bank records, creating sham correspondence, and establishing a fake website to mirror that of a foreign bank, to deceive Infinite Reality into believing that Cole had billions of dollars he was prepared to invest in the company.”
The three charges carry maximum prison sentences if Cole is found guilty:
- Wire fraud: up to 20 years
- Conspiracy to commit wire fraud: up to 20 years
- Conspiracy to commit securities fraud: up to 5 years
The impact on Napster remains uncertain. The legacy music service shut down earlier this year and relaunched with AI-generated music replacing licensed label catalogues. The company, now rebranded as Napster, has shifted its focus to agentic AI technology.
