US Govt prepares expert testimony in Zima Digital Assets case
Several months after the arrest of John Michael Caruso and Zachary Salter, the individuals behind fraudulent cryptocurrency scheme Zima Digital Assets, the United States Government is preparing the expert testimony in this case.
On October 23, 2020, the Government submitted a notice at the Arizona District Court, revealing that it plans to use expert witness testimony of Scott Holt, Forensic Accountant.
The Government notes that the indictment charges 17 counts against Caruso, also known as Kryp+0 K!ng, and 12 counts against Salter. These charges include conspiracy, wire fraud, and money laundering. Further, the indictment alleges a fraudulent scheme involving millions of dollars flowing through the defendants’ bank accounts. The evidence in this matter includes thousands of pages of bank and financial records.
Mr Holt is expected to testify regarding his analysis of these financial records. Based on Mr Holt’s analysis of the financial records to date, it is expected that he will testify that none of the investor deposits at issue in this case were used to purchase cryptocurrency investment funds or other “blockchain based assets.”
Let’s recall that Caruso and Salter were both arrested on January 30, 2020, and charged by criminal complaint with conspiracy to commit wire fraud and money laundering.
The Indictment alleges that the duo operated purported cryptocurrency investment fund Zima Digital Assets. The scheme, in reality, was a fraud. Caruso and Salter gt 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.