An Arizona resident has pleaded guilty to charges of money laundering and conspiracy to obstruct justice in connection with a scheme that defrauded investors of more than $13 million. Vincent Anthony Mazzotta Jr., 54, also known by aliases including “Vincent Midnight,” “Delta Prime,” and “Director Vinchenzo,” admitted his role in a plan that promised high-yield profits from investments in cryptocurrency markets using automated trading robots powered by artificial intelligence.
According to court documents, Mazzotta, who previously lived in Hollywood Hills but now resides in Arizona, worked with co-defendant David Saffron and others to lure victims into investing with companies such as Mind Capital and Cloud9Capital. The group falsely claimed that these companies could generate short-term, high-yield returns through advanced cryptocurrency trading strategies.
Authorities stated that the scheme went further when Mazzotta and Saffron created a fictitious government entity called the Federal Crypto Reserve (FCR). They solicited additional funds from investors under the pretense that FCR would investigate the crypto-investment firms after they disappeared with investor money.
United States District Judge Dale S. Fischer has scheduled sentencing for December 15. Mazzotta faces up to 10 years in federal prison for money laundering and up to five years for conspiracy to obstruct justice.
“New types of investments such as Bitcoin and other cryptocurrencies may seem alluring, but they also carry the risk of criminals using their relative novelty to prey on victims,” said United States Attorney Bill Essayli. “I encourage investors to be skeptical when approached by anyone promising novel riches. An ounce of prevention is worth a pound of cure.”
“Vincent Mazzotta defrauded investors in a sophisticated cryptocurrency scheme and then doubled down by using a fake government entity to further victimize those who had entrusted him with their money,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Combatting fraud in digital assets is critical to the Criminal Division’s efforts to vindicate victims’ interests and to keep bad actors out of the crypto markets. The Department and its law enforcement partners will aggressively pursue and hold accountable fraudsters who use the veneer of legitimacy and public trust to steal from investors.”
“The defendants in this case purported to be U.S. governmental entities to legitimize their scams, before ultimately attracting the scrutiny of actual federal authorities who were special agents from IRS Criminal Investigation,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “Today’s admission of guilt is another example of our resolve and unique ability to unravel complex financial transactions regardless of how sophisticated the scheme may be.”
Court filings reveal that after Saffron’s arrest, Mazzotta conspired with others to hide evidence at Saffron’s apartment, including destroying an iPad and contents from a personal safe. He also worked with co-conspirators to falsify business records at Runway Beauty Inc., aiming to hide his involvement from a federal grand jury.
The investigation is being conducted by IRS Criminal Investigation.
Prosecution is being handled by Assistant United States Attorney James C. Hughes along with Justice Department Trial Attorneys Theodore Kneller and Siji Moore.
