An Arizona resident has admitted to 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, who previously lived in Hollywood Hills and is also known as “Vincent Midnight,” “Delta Prime,” and “Director Vinchenzo,” entered his guilty plea before United States District Judge Dale S. Fischer in Los Angeles.
According to court documents, Mazzotta and his co-defendant, David Saffron, promised high-yield profits from investments in cryptocurrency markets using automated trading robots powered by artificial intelligence. They operated through companies such as Mind Capital and Cloud9Capital, targeting victims with promises of short-term gains.
Mazzotta pleaded guilty to one count each of money laundering and conspiracy to obstruct justice. He faces up to 10 years in federal prison for the money laundering charge and up to five years for the obstruction charge. Sentencing is scheduled for December 15.
“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.”
The defendants created a fictitious government entity called the Federal Crypto Reserve (FCR) after their initial frauds. They solicited additional funds from victims under the pretense that FCR would investigate crypto-investment firms like Mind Capital and Cloud9Capital that had disappeared with investor money.
“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.”
Authorities say Mazzotta conspired with others after Saffron’s arrest, working together to destroy evidence at Saffron’s apartment—including an iPad and contents from a personal safe—and falsifying business records at Runway Beauty Inc., his company, in an effort to hide involvement from investigators.
“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 IRS-Criminal Investigation 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.”
IRS Criminal Investigation led the inquiry into this matter.
Assistant United States Attorney James C. Hughes (Major Frauds Section) along with Justice Department Trial Attorneys Theodore Kneller and Siji Moore are prosecuting the case.
