Former Hollywood Hills resident pleads guilty to money laundering in $13 million crypto Ponzi scheme
Former Hollywood Hills resident pleads guilty to money laundering in $13 million crypto Ponzi scheme
A former Hollywood Hills resident pleaded guilty on Monday, July 28 to money laundering and conspiracy to obstruct justice for his role in a cryptocurrency Ponzi scheme that defrauded investors of over $13 million, according to the U.S. Department of Justice.
Vincent Anthony Mazzotta Jr., 54, of Arizona, formerly of the Hollywood Hills, and co-defendant, David Saffron, promised investors profits for investing in cryptocurrency using an automated trading AI robot, the U.S. Attorney’s Office in Los Angeles said in a statement.
Mazzotta, who went by various nicknames including “Vincent Midnight,” “Delta Prime” and “Director Vinchenzo,” promised investors high-yield profits in a short amount of time if they invested with cryptocurrency investment companies. Mazzotta and his co-defendant’s companies operated under the names Mind Capital, Cloud9Capital and more, according to the U.S. DOJ.
To further the scheme, Mazzotta and Saffron allegedly created what prosecutors called “a fictitious government entity,” the Federal Crypto Reserve. They received more money, thousands of dollars, from investors to have the Federal Crypto Reserve investigate the crypto companies, Mind Capital, Cloud9Capital and others, that had taken the victims’ investments and disappeared. In total, investors were defrauded of over $13 million, according to the U.S. DOJ.
“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 said in a statement.
Authorities say Mazzotta obstructed justice by working with others to destroy evidence after Saffron was arrested, destroying an iPad and the contents of a safe at Saffron’s apartment. He also conspired to falsify records of Runway Beauty Inc., his business, to hide from a federal grand jury that he had been involved in the investment fraud scheme, according to the U.S. DOJ.
Mazzotta is scheduled to be sentenced on Dec. 15, when he will face a maximum of 10 years in federal prison for the count of money laundering and a maximum of five years in federal prison for the count of conspiracy to obstruct justice. Saffron, an Australian national living in Los Angeles when he was arrested, has pleaded not guilty and is scheduled to go to trial on Sept. 16.
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