300% in 45 days and advanced AI tools: how did the perpetrators gain the trust of the victims and what did they spend the money on?
David Gilbert Saffron, 51, from Australia, and Vincent Anthony Mazzotta, 52, from Los Angeles, have appeared in court on charges of fraud, money laundering and creating a pyramid scheme.
According to the case file, the suspects developed an ingenious 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, fraudsters created several financial structures with convincing names like Circle Society, Bitcoin Wealth Management and Omicron Trust.
Investors were offered different investment plans that differ in income level. Such investment plans as Weekly BTC, Year of the Pig and The Power of 3 were published on the Circle Society website. The Power of 3 plan description stated a profit of 300% (from invested funds) for 45 days. And the Year of the Pig tariff assumed 188% for 38 days.
As a result, Saffron and Mazzotta have collected at least $ 11 million in cryptocurrency from victims since September 2018. However, instead of investing, these funds were used to pay for the attributes of luxury living, 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 cases. Some victims believed to the last that someone else stole the money, and Saffron and Mazzotta sincerely try to help.
To cover their tracks and obstruct the investigation, the criminals resorted to various tricks: they concealed assets obtained from victims, destroyed evidence, and falsified financial records.
In particular, they conducted chains of transfers between several virtual wallets and services in order to confuse cash flows.
Currently, criminals face up to 20 years in prison for each fraud case, plus an additional term for obstruction of justice. The investigation is being handled by the Internal Revenue Service and the Commodity Futures Trading Commission.
David Gilbert Saffron, 51, from Australia, and Vincent Anthony Mazzotta, 52, from Los Angeles, have appeared in court on charges of fraud, money laundering and creating a pyramid scheme.
According to the case file, the suspects developed an ingenious 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, fraudsters created several financial structures with convincing names like Circle Society, Bitcoin Wealth Management and Omicron Trust.
Investors were offered different investment plans that differ in income level. Such investment plans as Weekly BTC, Year of the Pig and The Power of 3 were published on the Circle Society website. The Power of 3 plan description stated a profit of 300% (from invested funds) for 45 days. And the Year of the Pig tariff assumed 188% for 38 days.
As a result, Saffron and Mazzotta have collected at least $ 11 million in cryptocurrency from victims since September 2018. However, instead of investing, these funds were used to pay for the attributes of luxury living, 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 cases. Some victims believed to the last that someone else stole the money, and Saffron and Mazzotta sincerely try to help.
To cover their tracks and obstruct the investigation, the criminals resorted to various tricks: they concealed assets obtained from victims, destroyed evidence, and falsified financial records.
In particular, they conducted chains of transfers between several virtual wallets and services in order to confuse cash flows.
Currently, criminals face up to 20 years in prison for each fraud case, plus an additional term for obstruction of justice. The investigation is being handled by the Internal Revenue Service and the Commodity Futures Trading Commission.
