- Victims believed an AI bot was trading their investments
- The perpetrators used the money for private mansions and jet flights
- They face decades in prison for wire fraud and money laundering
On Dec. 12, the US Department of Justice indicted a US and an Australian national for running a cryptocurrency Ponzi scheme. They perpetrated fraud in an amount exceeding $25 million.
David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of Los Angeles, deceived victims into believing they were using an artificial intelligence bot to trade their investments in cryptocurrency markets and make money. The defendants promoted the investment programs under names such as Omicron Trust, Circle Society, Mind Capital, Bitcoin Wealth Management, and Cloud9Capital.
Funds not invested in crypto as promised
Instead of doing what they promised, the perpetrators used the money to rent private mansions, pay for private chartered jet flights, private security guards, a personal chef, and luxury hotels.
A crypto Federal Reserve
Mazzotta and Saffron created a fake establishment called the Federal Crypto Reserve to perpetrate their scheme. According to the charges, they solicited their customers to pay the Reserve to investigate and recover their losses after convincing them to invest in one of the crypto programs.
To hide his true identity, Saffron used aliases such as Dave Gabe and David Gilbert and pseudonyms like Bitcoin Yoda and the Blue Wizard.
A slew of charges
The two men conspired to obstruct judicial proceedings by faking records, destroying evidence, and hiding assets. They used crypto mixers to hide the source and location of their customers’ funds and methods such as “blockchain hopping.”
They have been charged with wire fraud, conspiracy to commit wire fraud, money laundering, and conspiracy to commit money laundering and obstruct justice.
The consequences of the crimes
If they are convicted, they face up to 20 years in prison for each wire fraud count, 20 years for each count of conspiracy to commit money laundering and wire fraud, and ten years for each count of money laundering. In addition, they face up to five years for conspiring to obstruct justice.
