that much U.S. Department of Justice (DOJ) Charges were recently made public against two individuals accused of orchestrating a cryptocurrency Ponzi scheme that defrauded investors of approximately $25 million.
The people presumed to be behind this operation are David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of California.
They operated a fraudulent cryptocurrency investment scheme that lured victims with promises of high returns.
Encryption Plan Revealed
According to court documents, Saffron and Mazzotta pitched their plan to investors as a program that would use artificial intelligence automated trading bots to trade assets in cryptocurrency markets.
The duo has promoted these programs under a variety of names, including Bitcoin Wealth Management, Cloud9Capital, Omicron Trust, Circle Society, and Mind Capital.
They created a false entity called the Federal Crypto Reserve, claiming that they could recover lost digital assets.
The alleged fraudsters established a pattern of enticing victims to invest in one of their cryptocurrency programs and then requesting payment to the federal cryptocurrency reserve to investigate and recover their losses.
Saffron, who uses several aliases and online personas such as Blue Wizard and Bitcoin Yoda, played a central role in this strategy.
Destruction and concealment of evidence
Saffron and Mazzotta reportedly used $25 million worth of the investor’s cryptocurrency assets to fund their lavish lifestyle as they continued their scheme.
This included expenses such as private chefs, luxury accommodations, mansion rentals, security guards, and charter flights.
He is also accused of conspiring to destroy evidence, including falsifying records and obstructing the execution of official duties.
They used techniques such as cryptocurrency tumblers and mixers, as well as implemented methods such as blockchain hopping to hide the source and location of victims’ investments.
Charges and Potential Penalties
The Justice Department charged Safran and Mazzotta with conspiracy to commit wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering.
Each person could be sentenced to up to 5, 10, or 20 years in prison for various counts.
Notably, Saffron faces an additional 10 years in prison.
As stated in the press release:
Saffron could also be sentenced to up to 10 years in prison, consecutive to his other sentences, if he commits a felony while on pretrial release.
In response to these plans, the DOJ urged victims to cooperate with the ongoing investigation by contacting them via designated contact information and email.