In any industry that has to do with money, they are inevitably scams and schemes are designed to rob investors of the hard-earned funds. However, the crypto industry is particularly susceptible in this case as it is an emerging industry and not enough information has been permeated about how it works and the prevention of scams. This has led many to fall victim to various types of Ponzi schemes that promise higher returns and many have lost their funds in the process. The schemes in question target people of different backgrounds, educational status and financial situations across the globe.
In one of the latest developments, two men have been charged for running a crypto Ponzi scheme that lured many people with their false presentation of a luxurious lifestyle on social media. Among some of the victims are a number of professional baseball players.
Caught in the Act
The two men in question are the founders of Zima Digital Assets, John Michael Caruso and Zachary Salter and they were arrested on January 30, 2020, by the United States Secret Service for their crimes.
Caruso claimed to be a cryptocurrency trader since 2012 and referred to himself as the ‘Crypto King’ in online spaces. He has a previous criminal history having been released from prison in 2017 and used social media to recruit his victims. Salter, on the other hand, is an upcoming R&B singer who goes by the stage name ‘Sweet Talker’. The two men had shown off a luxurious lifestyle on social media but did not report any taxable income. They have since been charged with conspiracy to commit wire fraud and money laundering.
It is estimated that the two had lured investors and switch to them about the $7.5 million since 2018 and among these victims are a number of professional baseball players. However, the complete number of victims is not known as the Zima website is still functioning on taking investments.
The investments, however, were not being invested in anything but instead, was funding the two men’s extravagant lifestyle. New investors funds would be used to pay out older investors which is reminiscent of a Ponzi scheme until the men were caught.