$25 Million Crypto Ponzi Scheme

The United States Department of Justice (DOJ) recently revealed charges against two individuals accused of orchestrating a cryptocurrency Ponzi scheme that defrauded investors of approximately $25 million.

The alleged masterminds behind this operation are 51-year-old David Gilbert Saffron of Australia and 52-year-old Vincent Anthony Mazzotta Jr. of California.

They operated a fraudulent crypto investment scheme that lured victims with false promises of high returns.

Crypto Scheme Revealed

According to court documents, Saffron and Mazzotta presented their scheme to investors as programs using artificial intelligence automated trading bots for asset trading in the crypto market.

The duo promoted these programs under various names, including Bitcoin Wealth Management, Cloud9Capital, Omicron Trust, Circle Society, and Mind Capital.

They created a false entity known as the Federal Crypto Reserve, claiming it could recover lost digital assets.

The alleged fraudsters established a pattern of inducing victims to invest in one of the crypto programs and then requesting payment to the Federal Crypto Reserve for investigating and recovering losses.

Saffron, using multiple aliases and online personas like the Blue Wizard and Bitcoin Yoda, played a central role in this strategy.

Destroying and Concealing Evidences

While continuing their scheme, Saffron and Mazzotta purportedly used $25 million worth of investors' crypto assets to fund extravagant lifestyles.

This included expenses such as personal chefs, luxury accommodations, mansion rentals, security guards, and chartered flights.

Additionally, they are accused of conspiring to destroy evidence by falsifying records and obstructing official proceedings.

They employed techniques like crypto tumblers and mixers, as well as implementing methods like blockchain hopping to conceal the sources and location of victims' investments.

Charges and Potential Penalties

The Justice Department has charged Saffron and Mazzotta with conspiracy to commit wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering.

Each faces maximum penalties of 5, 10, and 20 years in prison for various counts.

Notably, Saffron faces an additional 10-year jail term.

As stated in the press release:

Saffron also faces up to 10 years in prison consecutive to any other sentence for committing felonies while on pre-trial release.

In response to the scheme, the DOJ has urged victims to reach out via a designated contact line and email, seeking cooperation in the ongoing investigation.