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A former Hollywood Hills resident who went under names such as “Vincent Midnight” and “Director Vincenzo” pleaded guilty Monday to a federal charge in connection with a cryptocurrency investment fraud scheme in which prosecutors say the victims cost more than $13 million.
Vincent Anthony Mazotta Jr., 54, who now lives in Arizona, has admitted to one count of money laundering and a conspiracy that thwarted justice. Prosecutors alleged that Mazzotta and his co-defendant David Saffron had seduced investors with false promises of high returns from automated cryptocurrency trading platforms, and later doubled the deception by establishing fake government agencies.
The plea was published by US lawyer Bilal A. Essayri for the Central District of California. Mazotta is scheduled to be sentenced December 15th by US District Judge Dale S. Fisher. He faces up to 10 years in federal prison for money laundering and up to 5 years for obstruction.
According to court documents, Mazzotta and Saffron told victims that investments in companies such as Mind Capital and Cloud9Capital will be managed by artificial intelligence-driven trading bots. Instead, federal authorities say the pair ran a Ponge-style scheme and diverted funds for personal use.
After the original company collapsed, Mazzotta and Saffron are said to have created a fictional entity called Federal Crypto Reserve (FCR). They then sought additional payments from the victims, claiming that FCR would investigate failed investment companies, despite the fact that Mazzotta and Saffron were behind those companies.
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“Vincent Mazzotta has doubled at the expense of more people who scam investors with sophisticated cryptocurrency schemes and entrusted money to him using fake government agencies,” said Deputy Assistant Advisor Matthew R. Galeotti, criminal division at the Department of Justice.
The US lawyer’s essay warned of the dangers associated with rapidly evolving investment technology. “While new types of investments, such as Bitcoin and other cryptocurrencies, may seem attractive, they also run the risk that criminals are using relative novelty to prey on victims,” the essayri said. “Once prevention is worth a pound of treatment.”
After Saffron’s initial arrest, Mazzotta worked with others to destroy the evidence in an attempt to block the federal investigation, prosecutors said. This includes removing the contents of the iPad and safe from Saffron’s apartment and hiding his involvement due to the forgery of financial records from Mazzotta’s company Runway Beauty Inc.
The IRS Criminal Investigation led the investigation. “The defendants in this case claimed to be a US government agency to justify their fraud,” said a special agent responsible for Tyler Hatcher, of the IRS-CI Los Angeles field office. “Acknowledgement of guilt today is another example of our unique ability to unravel our resolve and complex financial transactions, regardless of how sophisticated the scheme is.”
The case is being charged by Assistant James C. Hughes of the main fraud section, and by Justice Department trial lawyer Theodore Neller and Siji Moore of the fraud section of the Criminal Division.
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