Arizona Man Pleads Guilty to Money Laundering Charges Related to Ponzi Scheme that Resulted in $13 Million in Investor Losses
LOS ANGELES – An Arizona man pleaded guilty today to money laundering and conspiracy to obstruct justice for his role in a scheme to defraud investors.
Vincent Anthony Mazzotta Jr., 54, a.k.a. “Vincent Midnight”, “Delta Prime,” and “Director Vinchenzo,” formerly of Hollywood Hills but currently residing in Arizona, conspired with his co-defendant and others to defraud investors by falsely promising high-yield profits from investments in cryptocurrency markets using automated trading robots powered by artificial intelligence, according to court documents.
Mazzotta pleaded guilty to one count of money laundering and one count of conspiracy to obstruct justice.
United States District Judge Dale S. Fischer scheduled a December 15 sentencing hearing, at which time Mazzotta will face a maximum penalty of 10 years in federal prison on the money laundering count and a maximum penalty of five years in federal prison on the conspiracy to obstruct justice count.
“New types of investments such as Bitcoin and other cryptocurrencies may seem alluring, but they also carry the risk of criminals using their relative novelty to prey on victims,” said United States Attorney Bill Essayli. “I encourage investors to be skeptical when approached by anyone promising novel riches. An ounce of prevention is worth a pound of cure.”
“Vincent Mazzotta defrauded investors in a sophisticated cryptocurrency scheme and then doubled down by using a fake government entity to further victimize those who had entrusted him with their money,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Combatting fraud in digital assets is critical to the Criminal Division’s efforts to vindicate victims’ interests and to keep bad actors out of the crypto markets. The Department and its law enforcement partners will aggressively pursue and hold accountable fraudsters who use the veneer of legitimacy and public trust to steal from investors.”
“The defendants in this case purported to be U.S. governmental entities to legitimize their scams, before ultimately attracting the scrutiny of actual federal authorities who were special agents from IRS Criminal Investigation,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “Today’s admission of guilt is another example of our resolve and unique ability to unravel complex financial transactions regardless of how sophisticated the scheme may be.”
Mazzotta and his co-defendant, David Saffron, falsely promised victims short-term, high-yield returns from cryptocurrency trading if the victims invested with cryptocurrency investment companies Mind Capital, Cloud9Capital and others. They also created a fictitious government entity called the Federal Crypto Reserve (FCR) and further victimized the investors by soliciting thousands of dollars to hire the FCR to “investigate” Mind Capital, Cloud9Capital and other crypto-investment firms that had disappeared with the victims’ investments. Mazzotta and Saffron defrauded victims of more than $13 million.
According to court documents, Mazzotta also conspired with others to obstruct justice. Specifically, Mazzotta worked with other co-conspirators after Saffron’s initial arrest to conceal and destroy evidence at Saffron’s apartment, including an iPad and the contents of a personal safe. Mazzotta also conspired to falsify the records of his business, Runway Beauty Inc., to conceal his involvement in the investment fraud scheme from a federal grand jury.
IRS Criminal Investigation is investigating this matter.
Assistant United States Attorney James C. Hughes of the Major Frauds Section and Justice Department Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section are prosecuting this case.
