US DOJ charges organizers of $25m cryptocurrency Ponzi scheme

The US Department of Justice has unsealed charges against two men suspected of orchestrating a $25 million cryptocurrency-related Ponzi scheme.

According to court documents, David Gilbert Shafron from Australia and Vincent Anthony Mazzotta Jr. from California conspired to defraud investors.

The scam offered a \”guaranteed return\” of 300% in three weeks, which would annualize to 186 000 000%. The organizers promised to use an automated trading bot with artificial intelligence for cryptocurrency trades.

The fraudulent programs were promoted under various names such as Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital.

The alleged criminals also offered victims a \”referral reward\” of 20% of deposits from friends and family.

However, instead of investing in digital assets, the defendants spent investors’ funds on personal needs.

“[The defendants] unlawfully misappropriated victims’ funds to pay for personal expenses, including private charter flights, stays in luxury hotels, renting private mansions, a personal chef, and private security,” according to the Justice Department press release.

According to investigators, from September 6, 2018, to the present, victims of the pyramid collectively invested at least $11 million, wiring the funds to Shafron’s Bitcoin wallet.

The suspects concealed assets through mixers, destroyed evidence, and falsified records, hindering the official investigation. They also used different names and aliases to communicate online. For example, Shafron presented himself as \”Blue Wizard\” or \”Bitcoin-Yoda\”.

Both face a maximum sentence of 20 years in prison for wire fraud, and a similar term for money laundering.

Earlier in November, US prosecutors brought charges against the founders and leaders of the DeFi project SafeMoon for multimillion-dollar fraud.

Earlier in November, US prosecutors brought charges against the founders and leaders of the DeFi project SafeMoon for multimillion-dollar fraud.