An Arizona man who masterminded a $13 million crypto Ponzi scheme pleaded guilty this week to money laundering and conspiracy to obstruct justice charges.
The U.S. Department of Justice (DOJ) says Vincent Anthony Mazzotta Jr., 54, schemed with his co-defendant David Saffron and others to fraudulently promise investors high-yield profits from crypto investments that pretended to rely on automated trading robots powered by artificial intelligence (AI).
Mazzotta Jr. lured investors by convincing them to sink money into multiple crypto investment companies. When those companies disappeared with the investors’ capital, he went one step further and created a fake government entity called the Federal Crypto Reserve (FCR), which solicited thousands of additional dollars from victims by pretending to investigate those same firms.
The DOJ says Mazzotta Jr. also obstructed justice after Saffron’s initial arrest by destroying evidence at his co-defendant’s apartment, and he attempted to falsify the records of his business, Runway Beauty Inc., to hide his participation in the fraud from a federal grand jury.
Bill Essayli, US Attorney for the Central District of California, warns that criminals like to use the “relative novelty” of crypto assets to prey on victims.
Mazzotta Jr. faces a maximum of 10 years in prison on the money laundering charge and five years for conspiring to obstruct justice.
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