After initially contesting the charges, an Arizona man has now pleaded guilty to defrauding victims out of $13 million through a crypto scheme involving fake AI trading bots and a fictitious government agency.
Summary
- Vincent Mazzotta has pleaded guilty nearly two years after being indicted in a $13M crypto Ponzi scheme.
- The scheme used fake AI trading bots and a fictitious agency called the “Federal Crypto Reserve” to defraud victims.
- He faces up to 15 years in prison for money laundering and conspiracy to obstruct justice.
Vincent Anthony Mazzotta Jr., who has been accused of running multiple fraudulent investment platforms under false identities, is awaiting sentencing for money laundering and conspiracy to obstruct justice, the U.S. Department of Justice said in a recent press release.
Who is Vincent Mazzotta, and what did he do?
Mazzotta, also known by aliases including “Vincent Midnight,” “Delta Prime,” and “Director Vinchenzo,” admitted in court to playing a central role in a multi-year scheme that deceived investors with promises of high returns through AI-powered crypto trading bots.
Prosecutors said he operated companies such as Mind Capital and Cloud9Capital, which claimed to use automated trading tools to generate short-term, high-yield profits.
Instead of investing the funds, Mazzotta and his co-conspirators misused the money for personal luxuries, including private jet flights, upscale hotel stays, mansion rentals, and hiring private security.
According to court documents, they laundered the stolen funds through crypto mixers to obscure the money trail.
Deception at play
After running the scheme for several years, Mazzotta’s firms eventually collapsed, leaving victims without access to their funds and no explanation from the operators. As complaints mounted and the platforms vanished without notice, investors began demanding answers.
In an effort to regain investor trust after the initial companies disappeared, Mazzotta helped create a fictitious government entity called the “Federal Crypto Reserve” (FCR).
He and his co-defendant, David Saffron, charged victims additional fees under the pretense of hiring the FCR to investigate the disappearance of their funds. This second layer of deception re-victimized individuals who were already defrauded in the initial scheme.
When authorities indicted Saffron in 2022, Mazzotta worked with unnamed co-conspirators to obstruct the federal investigation.
He destroyed an iPad related to the scheme, tampered with documents, and falsified business records related to his firm, Runway Beauty Inc., to hide his role in the operation. Authorities said these actions formed the crux of the obstruction count.
Mazzotta was formally charged in a superseding indictment unsealed in December 2023 as part of the DOJ’s expanded case against Saffron and initially pleaded not guilty, but has now admitted to one count of money laundering and one count of conspiracy to obstruct justice.
He faces up to 15 years in federal prison—10 years for the laundering charge and 5 years for obstruction. A judge will determine his sentence at a later date based on federal guidelines.
Scammer gets 97 months for $40m ponzi
In June 2025, authorities sentenced Dwayne Golden to 97 months in prison for orchestrating a $40 million fraud using sham crypto investment platforms like EmpowerCoin and ECoinPlus. Golden and his co-defendants promised guaranteed returns, but instead used new investor funds to pay earlier participants and enrich themselves.
Golden and his partners also attempted to obstruct justice by destroying evidence and submitting false information to federal investigators. The court ordered Golden to forfeit over $2.4 million, with restitution pending. Several co-conspirators in that case are still awaiting sentencing.
Federal agencies have ramped up crypto fraud enforcement in recent months. In addition to Ponzi cases, the DOJ has also pursued forfeiture actions.
