Major League Baseball Players Get Involved In Crypto Ponzi Scheme

Two men accused of an alleged crypto ponzi scheme attracted investors, including professional baseball players, with social media posts touting their rich life.

On January 30 John Michael Caruso, aged 28, and Zachary Salter, aged 27, founders of Arizona-based Zima Digital Assets, were arrested by the Secret Service.

In social media posts Caruso called himself, ”Krypto King” and stated that he has been a crypto investor since 2012. He has a criminal background and was last released from prison at the end of 2017.

Salter is an ambitious R&B singer known to a wider audience as ”Sweet Talker”.

Despite the claims about absence of taxable income, the duo advertised their extravagant life in social media, luring investors.

They were charged with conspiracy to commit wire fraud and money laundering.

An unknown number of MLB players scammed

The complaint states that since June 2018 Salter and Caruso duped investors into giving them at least $7.5 million. Some of the investors are formal professional baseball players and senior citizens. As Zima continues to accept investments, the total amount of lost funds is not determined.

Zima’s website states that the company “operates various private funds focusing on investments in cutting-edge technologies, including crypto and other blockchain based assets,” and several prominent resources, such as Forbes, Entrepreneur, and Cigar Aficionado, featured Salter and Caruso as successful cryptocurrency investors.

A Business insider story described Caruso as “the Michael Jordan of algorithmic cryptocurrency trading.”

No cryptocurrency bought

Forensic accountants are convinced that money taken by Zims from its prospective investors were not invested in cryptocurrency. The duo instead used the funds to live the luxurious life, renting luxury cars for $350,000 and private jets for $610,000, and a mansion (called ”the Krypto Castle”), as well as purchasing various jewellery and designer clothes.

Caruso had many luxury cars including a Lamborghini, and the duo lost $830,000 within 143 hours of gambling at Las Vegas casinos.

They often advertised their lifestyle on Instagram and Facebook, including a video purporting that Zima manages $1 billion in assets. They also used direct messaging on social media in order to communicate with investors.

Among their victims are former Major League Baseball players and their relatives, together with a 76-year-old man, who lost $200,000 and a 86-year-old, who lost $60,000.

The investigation established that investors received $1.9 million in paybacks as ”returns”.

“The pattern of investor payments against investor payouts with no investment of funds is consistent with … a Ponzi scheme,” court filings indicate.