An Arizona man, known by aliases such as “Vincent Midnight” and “Director Vinchenzo,” has admitted guilt in running a sophisticated cryptocurrency Ponzi scheme that cheated investors out of over $13 million — and subsequently established a phony government agency to defraud them once more.
Vincent Anthony Mazzotta Jr., 54, who previously lived in Hollywood Hills, California, and now calls Arizona home, confessed on Monday to charges of money laundering and conspiracy to obstruct justice in a case that prosecutors claim took advantage of the surging interest in digital currencies to deceive numerous victims.
Promises of AI-Powered Crypto Riches
As per court records, Mazzotta, together with co-defendant David Saffron, assured investors of quick, high-yield returns through firms like Mind Capital and Cloud9Capital. Their pitch? State-of-the-art AI-driven trading bots that were said to excel in the cryptocurrency markets and yield massive profits.
In truth, the whole scheme was a Ponzi operation, with investor money redirected into the hands of the conspirators. However, the deception continued even after the investment firms went under. In a shocking turn of events, Mazzotta and his accomplices created a fictitious federal agency — the so-called Federal Crypto Reserve (FCR) — and subsequently deceived their initial victims into shelling out thousands of additional dollars for the FCR to “look into” the very cryptocurrency companies that had already disappeared with their funds.
“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.
Cover-Up Attempts and Evidence Destruction
As federal authorities started to tighten their grip, Mazzotta tried to erase any evidence of his actions. Following Saffron’s arrest, he plotted to eliminate and hide crucial evidence, which included an iPad and items from a personal safe. Additionally, he manipulated financial documents for his business, Runway Beauty Inc., in a bid to obscure his connection from a federal grand jury.
“This case highlights the risks of emerging financial technologies being exploited by fraudsters,” said U.S. Attorney Bill Essayli for the Central District of California. “I urge all investors to be wary of anyone promising fast, guaranteed returns — especially in high-risk sectors like cryptocurrency.”
Confronting Significant Prison Sentences
Mazzotta admitted guilt to:
- A single charge of money laundering (maximum sentence: 10 years behind bars)
- A single charge of conspiracy to obstruct justice (maximum sentence: 5 years)
A federal judge will decide the ultimate sentence at a future date, considering the U.S. Sentencing Guidelines and various other legal elements. “The defendants in this case posed as U.S. government entities to legitimize their scams,” said IRS-CI Special Agent in Charge Tyler Hatcher. “Today’s admission of guilt is proof of our ability to unravel even the most sophisticated financial frauds.”
Federal prosecutors are urging anyone who may have been defrauded by Mazzotta, Saffron, or their companies to come forward. Victims can contact the Justice Department’s Victim Witness Unit at (888) 549-3945 or victimassistance.fraud@usdoj.gov
