Digital Assets: Founding Duo of Zima Digital Assets Arrested In $7.5M Criminal Complaint
Zima Digital Assets focused on investments in crypto- and blockchain-based assets.
The United States Secret Service arrested John Michael Caruso, 28, of Scottsdale, Arizona, and Zachary Salter, 27, of Paradise Valley, Arizona, on January 30, 2020, for allegedly conspiring to commit wire fraud and for money laundering, according to FINANCEFEEDS.
The arrests were announced by the U.S. Attorney’s Office, District of Arizona on February 5, 2020.
Zima Digital Assets Website claims
The website of Zima Digital Assets says the firm “operates various private funds focusing on investments in cutting-edge technologies, including crypto and other blockchain-based assets.”
The Zima website also claims that “the principals at Zima Digital Assets have been investing in long and short cryptocurrency and blockchain technology strategies since 2012. Zima Digital Assets employ’s an array of exotic proprietary trading strategies. Including but not limited to arbitrage opportunities, 80 long / 20 short, binary options positions, event-based trading in addition to leverage, and margin application. Capacity constraint is a hallmark of our firm values”.
MLB players and families lost millions of dollars
The criminal complaint, filed in Arizona Federal Court last week, alleges that Caruso, who called himself “Kryp+0 K!ng,” and his business partner bilked more than 100 investors, including former professional baseball players, out of at least $7.5 million over the past 18 months, as reported by Quartz.
Moreover, according to the court filing, there was no “no evidence any of the investment funds…have gone to any cryptocurrency/digital asset investment, or to any investment of any kind.”
Further, the “pattern of investor payments against investor payouts with no investment of funds is consistent with…a Ponzi scheme,” the complaint alleged.
According to CRYPTOKNOWMICS, a forensic accountant found that the Zima founders used the money investors handed them for their luxurious cars, private jets, mansion, jewelry and designer dresses.
While Caruso is a history-sheeter, Salter does not have a prior criminal record.
Prosecutors have moved to detain Caruso, calling him a flight risk.
However, Salter was released to his father’s custody, according to Quartz.
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