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MLB Players Allegedly Among Victims of American Crypto Fund Scam

MLB Players Allegedly Among Victims of American Crypto Fund Scam 101
Source: iStock/jmsilva

The Arizona District Attorney (DA) has announced that two men have been charged with fraud and money laundering offenses after allegedly duping victims – including octogenarians and a number of ex-Major League Baseball (MLB) players – into investments in a bogus crypto investment fund.

The DA said that John Michael Caruso, 28, and Zachary Salter, aged 27, were arrested and charged with conspiracy to commit wire fraud via their company, Zima Digital Assets. A criminal complaint filed by the American Secret Service to a state magistrate’s court judge outlines how the duo allegedly embezzled millions of dollars’ worth of investor funds from June 2018 to January 2020.

The document, which was shared online by media outlet Quartz, includes details of the two men’s social media activities, describing how they were “riding together on private jets,” as well as “photographs and videos of two large mansions (one valued at approximately USD 9 million dollars, located in Paradise Valley, and one valued at approximately USD 8.5 million, located in Scottsdale).”

The duo appears to have run the company as a Ponzi scheme, promising to reward investors for bringing new members onboard.

The complaint states that Zima Digital Assets had been used to amass funds for its founders’ extravagant lifestyles.

Data provided by the Arizona Motor Vehicle Division shows that Caruso owns a 2019 Lamborghini Urus, and Salter is the owner of a number of luxury cars, including a Mercedes-Benz and a BMW.

Details of Salter’s credit card spending showed that he had spent money on luxury car rentals, designer clothing, firearms, travel and expensive hotels.

The document also contained descriptions of the pair’s alleged victims, including a 76-year-old who transferred a total of USD 200,000 to Caruso, and an 86-year-old who sent him USD 60,000. The victim list is allegedly long, and includes former MLB players and their families.

Per grand jury subpoenas sent to a number of American financial institutions, victims invested USD 7.5 million worth of funds with Caruso to invest in cryptocurrencies, with only about USD 1.9 million returned.

Forensic accountants say they have found no proof that any of those funds, received from about 90 individual and corporate investors, had ever been invested in cryptocurrency.

The fund’s revenues contrasted starkly with the men’s declared earnings. In 2018, Caruso’s reported earned income was USD 22,800, while Salter reported he had made zero dollars in earnings over the same period.

The men went to great lengths to generate publicity for their business. One Media OutReach article published on media platforms as recently as August last year, stated that Zima Digital Assets was a “premier cryptocurrency fund” and claimed it was “one of the fastest-growing crypto investment funds in the world.”

The piece called Caruso the “Michael Jordan of Algorithmic Cryptocurrency Trading.”

The article’s author wrote that Caruso was “one of the top cryptocurrency traders amongst high profile investors on Wall Street,” and even went on to posit that he was the “world’s greatest cryptocurrency trader of all time, because of his ability to time markets, spot trends and sort data/key pieces of information for trades.”

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