David Gilbert Saffron, 51, from Australia, and Vincent Anthony Mazzotta, 52, from Los Angeles, are on trial on charges of fraud, money laundering and creating a financial pyramid.
According to the case materials, the suspects developed a clever scheme to attract investment in cryptocurrency trading. They promised investors that they would use AI technologies and automated bots to generate super profits - up to 300% within 3 weeks (equivalent to 186 million percent per annum).
To gain the trust of victims, scammers have created several financial structures with convincing names like Circle Society, Bitcoin Wealth Management and Omicron Trust.
Investors were offered different investment plans, differing in income levels. Investment plans such as Weekly BTC, Year of the Pig and The Power of 3 were published on the Circle Society website. The description of The Power of 3 plan stated a profit of 300% (of the invested funds) in 45 days. And the Year of the Pig tariff assumed 188% in 38 days.
As a result, since September 2018, Saffron and Mazzotta have collected at least $11 million in cryptocurrency from victims. However, instead of investing, these funds were used to pay for the trappings of a luxurious life, including private jets, luxury hotels, rental mansions, a personal chef and security guards.
The attackers came up with another trick - they created a fictitious Federal Crypto Reserve structure and offered some investors to return lost funds in exchange for an additional fee for “investigating” their affairs. Some victims believed until the very end that someone else had stolen the money, but Saffron and Mazzotta are sincerely trying to help.
To cover their tracks and impede the investigation, criminals resorted to various tricks: hiding assets received from victims, destroying evidence and falsifying financial records.
In particular, they carried out chains of transfers between several virtual wallets and services in order to confuse money flows.
Criminals now face up to 20 years in prison for each fraud case, plus an additional term for obstruction of justice. The IRS and Commodity Futures Trading Commission are investigating.
According to the case materials, the suspects developed a clever scheme to attract investment in cryptocurrency trading. They promised investors that they would use AI technologies and automated bots to generate super profits - up to 300% within 3 weeks (equivalent to 186 million percent per annum).
To gain the trust of victims, scammers have created several financial structures with convincing names like Circle Society, Bitcoin Wealth Management and Omicron Trust.
Investors were offered different investment plans, differing in income levels. Investment plans such as Weekly BTC, Year of the Pig and The Power of 3 were published on the Circle Society website. The description of The Power of 3 plan stated a profit of 300% (of the invested funds) in 45 days. And the Year of the Pig tariff assumed 188% in 38 days.
As a result, since September 2018, Saffron and Mazzotta have collected at least $11 million in cryptocurrency from victims. However, instead of investing, these funds were used to pay for the trappings of a luxurious life, including private jets, luxury hotels, rental mansions, a personal chef and security guards.
The attackers came up with another trick - they created a fictitious Federal Crypto Reserve structure and offered some investors to return lost funds in exchange for an additional fee for “investigating” their affairs. Some victims believed until the very end that someone else had stolen the money, but Saffron and Mazzotta are sincerely trying to help.
To cover their tracks and impede the investigation, criminals resorted to various tricks: hiding assets received from victims, destroying evidence and falsifying financial records.
In particular, they carried out chains of transfers between several virtual wallets and services in order to confuse money flows.
Criminals now face up to 20 years in prison for each fraud case, plus an additional term for obstruction of justice. The IRS and Commodity Futures Trading Commission are investigating.
