- Two individuals indicted for allegedly operating a $25M AI crypto trading Ponzi scheme that falsely promised high returns through an AI trading bot.
- Defendants accused of spending victims’ funds on luxury items and using cryptocurrency mixers to conceal investments.
- Charges include conspiracy to commit wire fraud, money laundering, and obstruction of justice, reflecting DOJ’s crackdown on crypto fraud.
The United States Department of Justice (DOJ) has indicted two individuals for allegedly operating a $25-million artificial intelligence (AI) crypto-trading Ponzi scheme.
Details of the Alleged Scam
According to the Dec. 12 announcement, Australian national David Gilbert Saffron and Los Angeles resident Vincent Anthony Mazzotta Jr. are accused of operating trading programs that falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits.
After receiving users’ deposits however, the two individuals allegedly spent the money on private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.
The defendants are also accused of concealing the victims’ cryptocurrency investments through interchain swaps and the use of cryptocurrency mixers to evade detection. The scheme operated under various names such as Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, Federal Crypto Reserve, and Cloud9Capital.
Charges Against the Defendants
Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release.
Since last year’s sanction of cryptocurrency mixer Tornado Cash, the US DOJ has focused extensively on boosting the compliance of blockchain entities. On Dec. 9, the DOJ revealed its methods for monitoring the compliance of cryptocurrency exchange Binance since its $43-billion settlement for money laundering and US sanction breaches.
Several sections of the DOJ’s criminal division will closely monitor the exchange’s activities, including the section for money laundering and asset recovery, the section for national security, the section for counterintelligence and export control, and the office for the Western District of Washington’s United States Attorney.
Conclusion
The DOJ continues to crack down on illegal crypto schemes as the blockchain industry grows. The charges against Saffron and Mazzotta demonstrate the department’s efforts to prosecute fraud and illicit financing in the cryptocurrency sector.
