Arizona Man Pleads Guilty in $13 Million Crypto Ponzi Scheme

Federal prosecutors say an Arizona man has admitted to running a large-scale crypto fraud that stole millions from investors.

Good to know

• The scam involved fake crypto companies and a made-up government agency.
• Victims were promised high returns from AI-powered trading bots.
• The guilty plea includes money laundering and obstruction of justice charges.

According to the U.S. Department of Justice (DOJ), Vincent Anthony Mazzotta Jr., 54, teamed up with co-defendant David Saffron and others to lure investors into several crypto investment companies. These firms promised big returns, claiming they used automated trading bots powered by artificial intelligence.

Once the companies vanished with investors’ money, Mazzotta Jr. took the scheme further by creating a fake government agency called the Federal Crypto Reserve (FCR). Through the FCR, he convinced victims to send even more money, pretending the agency was investigating the very scams he orchestrated.

After Saffron’s arrest, prosecutors say Mazzotta Jr. destroyed evidence in his co-defendant’s apartment. He also tried to hide his involvement by falsifying business records for his company, Runway Beauty Inc., during a federal grand jury investigation.

U.S. Attorney Bill Essayli for the Central District of California warned that fraudsters often use the “relative novelty” of crypto assets to trick victims into handing over their money.

Mazzotta Jr. faces a maximum of 10 years in prison for money laundering and another five years for conspiring to obstruct justice. Sentencing has not yet been scheduled.