An Australian and a Californian are facing charges in connection with an alleged fraudulent cryptocurrency Ponzi scheme, amassing over $25 million in ill-gotten gains.

David Gilbert Saffron and Vincent Anthony Mazzotta Jr., allegedly set up a deceptive scheme that falsely promised investors high returns through various trading programs.

Crypto Ponzi Scheme, Advertising AI Use

According to a recent statement, the duo operated under multiple names. These names included Circle Society, Bitcoin Wealth Management, and Cloud9Capital. The duo allegedly misappropriated funds intended for crypto investments to finance their lavish lifestyles.

However, the creation of a false entity, the “Federal Crypto Reserve,” worsened the fraudulent scheme, coercing victims into making additional payments for supposed loss recovery.

David Gilbert Saffron, utilizing aliases like Blue Wizard and Bitcoin Yoda, reportedly concealed his identity throughout the deceptive operation.

Facing A Substantial Potential Jail Term For Crypto Ponzi Scheme

The charges brought against Saffron and Mazzotta include conspiracy to commit wire fraud. Additionally, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering.

Read more: What Is a Rug Pull? A Guide to the Web3 Scam

Meanwhile, the indictment further reveals their attempts to obstruct justice by destroying evidence. Furthermore, falsifying records, and concealing the source of victims’ crypto investments.

However, they purportedly executed this through techniques such as “blockchain hopping” and utilizing crypto mixers and tumblers.

If convicted, the accused could face a maximum penalty of 20 years in prison for each count of wire fraud and money laundering. Saffron faces an additional 10 years for felonies committed while on pre-trial release.

Read more: 15 Most Common Crypto Scams To Look Out For

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

The post Duo Charged for Exploiting AI Craze with False Crypto Gain Promises appeared first on Crypto News Australia.

---

Filed under: Bitcoin - @ December 13, 2023 1:02 am