Zachary Salter, the co-founder of Zima Digital Assets alongside 28-year-old John Caruso, has not committed money laundering and conspiracy to commit wire fraud in his pre-trial trial in Arizona on March 4.
The criminal charge alleges that the couple had a so-called cryptocurrency investment plan that was used to cheat their clients of more than $ 9 million in a classic Ponzi scheme.
Approximately $ 1.9 million in deposits was returned to early investors as assumed investment returns. The supposed profits served to validate the schedule, which contributed to a further deposit wave.
The remaining $ 7 million was lavishly spent – on vacations, luxury car rentals, private jets, and casino gambling. Despite showing off their excessive lifestyle on social media, the couple did not claim a taxable income.
The pair has cheated more than 90 investors, including older citizens and former professional baseball players. They were arrested on January 30.
The charge includes allegations of false statements in investor contracts and incorrect statements in direct messages to clients.
Caruso also pleaded not guilty during his trial on February. 26. Caruso has a criminal record and was last released from prison in 2017.
Both men will now be faced with a jury ruling on July 4, 2020. If they are convicted of one of the two charges, Salter and Caruso will have to lose all property acquired through the criminal system.
Following a hearing at the beginning of February, the Prosecution claimed that “there is no evidence that the investment funds provided to Caruso and Salter have gone to an investment in cryptocurrency / digital assets or any other form of investment, such as fraudulent misrepresentation by both Caruso and Salter. “
It was heard that the pair used investor funds to make $ 830,000 in gambling losses, $ 670,000 in credit card spending, $ 540,000 in private jets and luxury vehicle rentals and $ 150,000 in rent for a 20,000-square-foot country home.
At the time of the February hearing, Zima Digital Assets still actively received investor funds.
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