Saturday, March 7, 2020

Pair linked to crypto Ponzi scheme in US pleads not guilty

 



Two co-founders of an alleged crypto Ponzi scheme have pleaded not guilty to a range of charges, following a criminal indictment on money laundering and conspiracy to commit wire fraud.

John Caruso and Zachary Salter of Zima Digital Assets have been accused of running a crypto scam responsible for defrauding some $9 million from its customers, in a structure defined as a "classic Ponzi scheme."

The first $1.9 million of deposits into the scheme were returned to early investors, validating the scheme and its claims for significant investment returns. These payments were allegedly used to encourage more investment in the scheme.

The following $7 million invested was purported to have been spent frivolously by the founders, including on luxury vacations, private jets and casino trips. The founders themselves claimed no taxable income during the period, despite showcasing their monied lifestyle on their social media profiles.

Some 90 investors were conned by the scheme, including former athletes and some elderly victims. The pair were arrested by law enforcement authorities on January 30, with an initial plea hearing for Salter taking place earlier today.

Caruso entered his not guilty plea on February 26, having previously been released from prison in 2017.

The case will now move to trial in front of a jury, scheduled to begin on July 4. If either party is convicted on the charges, they will be required to return all assets acquired through the scheme or from the proceeds of their crimes.

Among the charges on the indictment are allegations of false statements in investor contracts, alongside misrepresentations through direct messages to investor clients.

At a hearing in February, the prosecution said, "There is no evidence any of the investment funds that have been provided to Caruso and Salter have gone to any cryptocurrency/digital asset investment, or to any investment of any kind, as fraudulently misrepresented by both Caruso and Salter."

On the date of the hearing, Zima Digital Assets was still receiving new funds from investors, which the co-accused were personally misappropriating to fund their own lavish lifestyles.

    Choose :
  • OR
  • To comment