A former resident of the Hollywood Hills pleaded guilty Monday to federal charges of defrauding investors out of more than $13 million in a cryptocurrency scheme.
Vincent Mazzotta Jr., 54, along with a co-defendant and others, bilked investors by falsely promising high-yield profits from cryptocurrency markets using automated trading robots powered by artificial intelligence, according to court documents.
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He pleaded guilty in Los Angeles federal court to one count of money laundering and one count of conspiracy to obstruct justice.
U.S. District Judge Dale S. Fischer scheduled a Dec. 15 sentencing hearing. Mazzotta faces up to 10 years in federal prison on the money laundering count and up to five years on the conspiracy count, according to the U.S. Attorney's Office.
Federal prosecutors said Mazzotta and co-defendant David Saffron falsely promised victims short-term, high-yield returns if the victims invested with cryptocurrency investment companies Mind Capital, Cloud9Capital and others.
The defendants also created a fictitious government entity called the Federal Crypto Reserve and solicited thousands of dollars to hire the FCR to "investigate" Mind Capital, Cloud9Capital and other crypto-investment firms that had disappeared with the victims' money, prosecutors said.
According to court documents, Mazzotta also conspired with others to obstruct justice by trying to hide and destroy evidence at Saffron's apartment after his arrest, including an iPad and the contents of a personal safe. Mazzotta also falsified the records of his business, Runway Beauty Inc., to hide his ties to the investment fraud scheme from a federal grand jury, the U.S. Attorney's Office said.
Saffron is scheduled to go on trial in September.
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