Court schedules trial of Zima Digital Assets scammers
The criminal proceedings against John Michael Caruso, also known as “crypto king” and Zachary Salter – the operators of fraudulent cryptocurrency scheme Zima Digital Assets, continue at the Arizona District Court.
On February 5, 2021, the Court scheduled the trial of Caruso and Salter. A status conference is set for February 18, 2021, whereas the jury trial is scheduled for June 8, 2021.
Let’s recall that early in 2020, the US authorities filed a complaint against Caruso and Salter, charging them with one count of conspiracy to commit wire fraud and money laundering. On January 30, 2020, Caruso was arrested on the federal charge.
The Indictment against Caruso and Salter alleges that the duo operated purported cryptocurrency investment fund Zima Digital Assets. The scheme, in reality, was a fraud. Caruso and Salter got more than $9 million from the victims but the money was not used for the purchase of cryptocurrency or other “blockchain based assets”. In fact, Caruso and Salter returned about $2 million of the deposits to early investors as purported investment profits.
The rest of the money they spent on private jets, vacations, luxury car rentals, and casino gambling. Bank records and casino records establish that Caruso has lived an extravagant lifestyle since June 2018. During this relatively short period, he took 30 trips to Las Vegas.
The Indictment notes a series of misrepresentations used by the defendants, including false statements in the contracts with the investors and false claims in direct messages to investors.
Caruso has tried several times to reopen his detention hearing. The last time, his argument was based on claims that he is “super rich”. On February 2, 2021, however, the Court nixed this attempt.
In particular, the Court determined that Caruso has not established a basis for re-opening the Court’s Order of Detention, as the evidence presented was known to the defendant previous to the Court’s original and subsequent detention determinations, and the new evidence presented is not material to the Court’s determination of flight and economic danger. Furthermore, the defendant has not established that his ability to present a defense is materially impacted by his continued detention.