An Australian citizen, David Gilbert Saffron, 51, and a California man, Vincent Anthony Mazzotta Jr., 52, have been charged in a superseding indictment for allegedly operating a cryptocurrency Ponzi scheme. The scheme is said to have defrauded victims of more than $25 million.
According to court documents, Saffron and Mazzotta are accused of conspiring to operate a fraudulent scheme that induced victims to invest in various trading programs. These programs falsely claimed to employ an automated trading bot with artificial intelligence for the cryptocurrency markets, promising high-yield profits. The investment programs were promoted under names such as Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital and Cloud9Capital.
Instead of investing the funds in cryptocurrencies as promised, the defendants allegedly diverted the victims' money for personal expenses. These expenses included flights on private planes, luxury hotel accommodations, rentals of private mansions, a personal chef, and private security guards.
To further execute the plan, Saffron and Mazzotta allegedly created a fictitious entity called the Federal Cryptocurrency Reserve. After convincing the victims to invest in one of the cryptocurrency programs, they allegedly fraudulently requested payments from the Federal Crypto Reserve to investigate and recover losses. Saffron is accused of using various aliases and online personas, including David Gilbert, Dave Gabe, Blue Wizard and Bitcoin Yoda, to conceal his identity.
The indictment alleges that the defendants conspired to obstruct official proceedings by concealing assets, destroying evidence and falsifying records. They are also accused of conspiring to conceal the source and location of victims' cryptocurrency investments through methods such as "blockchain hopping" and using services known as "mixers" or "tumblers" designed to prevent the cryptocurrency tracking.
Saffron and Mazzotta face charges including conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering and money laundering. Additionally, Saffron is alleged to have committed serious crimes while on pretrial release. If convicted, each count of conspiracy to commit wire fraud and money laundering carries a maximum penalty of 20 years in prison, 20 years for each count of wire fraud, 10 years for each count of money laundering, and five years for conspiracy. to obstruct justice. Saffron could also face up to 10 years in prison consecutively for committing serious crimes while on pretrial release.
