DOJ Charges Two Men For $25 Million Crypto “Trading Bot” Ponzi Scheme
In another crackdown against crypto criminals, the U.S. Department of Justice (DOJ) has charged two middle-aged men with stealing over $25 million from victims in a so-called “cryptocurrency Ponzi scheme.”
Citing court documents, the DOJ accused David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of Los Angeles of enticing victims to invest in fake trading programs supposedly run by artificial intelligence trading software designed to earn them yield on their crypto.
Rather than invest the money in crypto, however, both men spent victims’ money on luxury personal items: private jets, mansion rentals, a chef, security guards, and luxury hotel accommodations.
“Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering,” read a DOJ press release on Tuesday. The combined charges mean both men face a maximum of 55 years in prison, with an additional 10 to Saffron for committing felonies while on pre-trial release.
The men marketed their program under various names, including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. After inviting victims to invest in one succh program, the men lured them to pay a fictitious entity called the “Federal Crypto Reserve” to investigate and recover their losses.
Saffron concealed his identity throughout the process, soliciting victim’s money through aliases and online personas like “Blue Wizard” and “Bitcoin Yoda.”
The men also sought to cover their tracks by falsifying records, destroying documents, and concealing victims’ crypto using techniques like “mixing” and “blockchain hopping.”
Canada’s “Crypto King”
The scheme is reminiscent of that employed by Canada’s infamous “crypto king.” The 23-year-old fraudster raised over $40 million from victims to invest in crypto and forex trading, but spent roughly 38% of it on private jets, vacations, and sports cars.
Back in March, Pleterski was abducted for three days as kidnappers drove around southern Ontario and beat him while demanding $3 million in ransom.
Last month, the DOJ announced a 63-month sentence against Miami crew leader Esteban Cabrera Da Corte for using fake identities and bank fraud to steal $4 million from a cryptocurrency exchange.
It also announced its largest enforcement action ever against crypto exchange Binance, which was fined $4 billion for floundering anti-money laundering requirements on its platform.
