A key participant in a cryptocurrency Ponzi scheme that claimed to use an AI-driven cryptocurrency trading robot and fake government agencies to defraud victims of $13 million has pleaded guilty.
The U.S. Department of Justice announced on Monday that Vincent Anthony Mazzotta Jr. admitted to his role in defrauding investors by promising high returns through a fictitious investment company using AI-driven cryptocurrency trading robots.
Mazzotta pleaded guilty to conspiracy to commit money laundering and obstruction of justice, with a maximum sentence of 15 years in prison for the two charges combined. The judge has not yet determined the sentencing.
The Department of Justice first charged Mazzotta at the end of 2023, which was a supplemental indictment in the agency's existing case against his alleged co-conspirator David Saffron, who has pleaded not guilty.
David Kagel was also charged in connection with the scheme and was sentenced to five years of probation after pleading guilty to conspiracy to commit commodity fraud in October, along with being ordered to pay over $13.9 million in restitution.
The Department of Justice stated that Mazzotta executed the scheme through companies including Mind Capital and Cloud9Capital, siphoning off millions from investors. The Department added that Mazzotta then helped create a fake government agency called "Federal Crypto Reserve," charging victims thousands of dollars under the pretense of investigating his companies, which "had already disappeared with the victims' investments."
Tyler Hatcher, a special agent in the IRS Los Angeles field office, noted that the use of a fake "U.S. government entity to legitimize the scheme" drew "scrutiny from actual federal authorities."
The Department of Justice alleged in its original indictment that from December 2017 to July 2023, user deposits to these companies were laundered through cryptocurrency mixers and then used to purchase a range of luxury items, such as private jet flights, luxury hotel stays, private mansion rentals, personal chefs, and private security.
The defendants allegedly used a series of fake companies while executing the scheme, including Circle Society, Bitcoin Wealth Management, and Omicron Trust.
Prosecutors stated that Mazzotta also used aliases such as Anthony, Delta Prime, and Director Vinchenzo, while Saffron used pseudonyms like David Gilbert, Dave Gabe, The Blue Wizard, and Bitcoin Yoda.
The Department of Justice indicated that after Saffron was indicted in June 2022, Mazzotta was prompted to collaborate with other unnamed co-conspirators to conceal and destroy evidence in Saffron's apartment.
Mazzotta allegedly destroyed an iPad and forged business records to hide his involvement in the scheme.
Saffron has been in custody since August 2023 and is set to face trial on September 16. He is charged with conspiracy to commit telecommunications fraud, telecommunications fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering.
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Original article: “Key Figure in $13 Million Cryptocurrency Ponzi Scheme Pleads Guilty”
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