Arizona Man Pleads Guilty in $13 Million Cryptocurrency Ponzi Scheme

An Arizona man has pleaded guilty to money laundering and conspiracy to obstruct justice after orchestrating a multi‑million‑dollar cryptocurrency Ponzi scheme that exploited investor trust and manipulated the digital asset market.

Vincent Anthony Mazzotta Jr, 54, also known as Vincent Midnight, Delta Prime, and Director Vinchenzo, formerly of the Hollywood Hills in Los Angeles but now residing in Arizona, admitted to defrauding investors through false promises of high‑yield returns from cryptocurrency markets. The fraudulent scheme centred on claims that automated trading robots powered by artificial intelligence would deliver exceptional profits.

According to court documents, Mazzotta and co‑defendant David Saffron lured victims to invest in cryptocurrency companies including Mind Capital and Cloud9Capital. They fabricated a government entity, the “Federal Crypto Reserve” (FCR), to bolster their credibility and further exploit victims by charging them for sham investigations into the very companies that had stolen their investments. The scam defrauded victims of more than $13 million.

In addition to the fraud, Mazzotta conspired to obstruct justice following Saffron’s arrest. He worked with others to destroy evidence, including an iPad and materials from a personal safe, and falsified records for his business, Runway Beauty Inc., to conceal his role in the fraud from a federal grand jury.

Acting Assistant Attorney General Matthew R Galeotti of the Justice Department’s Criminal Division emphasised the department’s commitment to pursuing bad actors in the cryptocurrency sector, noting the sophisticated nature of the scheme. U.S. Attorney Bill Essayli for the Central District of California warned that the allure of high‑risk investments such as Bitcoin continues to attract criminal exploitation.

Special Agent in Charge Tyler Hatcher of IRS Criminal Investigation’s Los Angeles Field Office highlighted the defendants’ misuse of a fictitious federal identity to legitimise their scam and praised the agency’s ability to dismantle complex financial crime networks.

Mazzotta pleaded guilty to one count of money laundering, carrying a maximum penalty of 10 years in prison, and one count of conspiracy to obstruct justice, carrying a maximum penalty of five years. Sentencing will be determined by a federal district court judge after consideration of statutory factors and sentencing guidelines.

The case is being investigated by IRS Criminal Investigation and prosecuted by Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section, alongside Assistant U.S. Attorney James Hughes for the Central District of California.

Read the press release here.