Accused of False Promises and Lavish Spending
The United States Department of Justice (DOJ) has indicted two individuals for allegedly operating a $25-million artificial intelligence (AI) crypto-trading Ponzi scheme. Australian national David Gilbert Saffron and Los Angeles resident Vincent Anthony Mazzotta Jr. are accused of operating trading programs that falsely promised high-yield profits using an AI automated trading bot. Instead, they allegedly spent the investors' money on extravagant expenses including private jet flights, luxury hotel accommodations, and personal security guards.
Concealing Cryptocurrency Investments
The defendants are also accused of hiding 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, and Cloud9Capital.
Charges and Additional Allegations
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.
DOJ's Focus on Compliance
Since last year's sanction of cryptocurrency mixer Tornado Cash, the U.S. DOJ has been actively working to ensure the compliance of blockchain entities. The DOJ recently revealed its methods for monitoring the compliance of cryptocurrency exchange Binance, following the exchange's $4.3-billion settlement for money laundering and U.S. sanction breaches. Several sections of the DOJ's criminal division will closely monitor Binance's activities, including those related to money laundering, national security, counterintelligence, and export control.
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