Crypto "#TradingBot " #Ponzi Scheme Busts: Two Men Charged by #DOJ
The US Department of Justice (DOJ) has charged two men with running a $25 million crypto Ponzi scheme disguised as a "trading bot." David Saffron and Vincent Mazzotta allegedly lured victims with promises of high returns from an automated trading bot, while using new investor funds to pay off earlier investors.
The Charges:
- Conspiracy to commit wire fraud
- Wire fraud
- Conspiracy to obstruct justice
- Conspiracy to commit money laundering
- Money laundering
The Scheme:
- Saffron and Mazzotta operated various entities, including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital.
- They lured victims with promises of high returns generated by an AI-powered trading bot.
- Instead, they used new investor funds to pay off earlier investors, creating the illusion of profitability.
- The scheme allegedly defrauded victims of over $25 million.
The Potential Penalties:
- Each count of conspiracy to commit wire fraud and money laundering carries a maximum penalty of 20 years in prison.
- Each wire fraud count carries a maximum penalty of 20 years in prison.
- Each money laundering count carries a maximum penalty of 10 years in prison.
- The conspiracy to obstruct justice charge carries a maximum penalty of 5 years in prison.
The Takeaway:
This case serves as a stark reminder of the dangers of investing in unregulated and potentially fraudulent cryptocurrency schemes. Investors should always conduct thorough research before investing any money, and should be wary of any promises of guaranteed or high returns.
