Arraignment of duo behind crypto scam Zima Digital Assets gets closer

Less than a month has passed since the arrest of John Michael Caruso, aka Kryp+0 K!ng, and Zachary Salter. The duo was arrested on charges of conspiracy to commit wire fraud and money laundering.

Since then, the information in the criminal proceedings against Caruso and Salter has continued to pile up, as shown by the latest document filed with the Arizona District Court.

For starters, the arraignment of the defendants is getting closer. The arraignment of John Michael Caruso is scheduled for February 26, 2020, whereas the arraignment of Zachary Salter is scheduled for March 4, 2020. At arraignment, the Court formally informs a defendant of charges contained in an indictment or information, provides the defendant with a copy of the charging instrument, and takes the defendant’s answer to those charges in the form of a plea.

Indictment in this case has been filed earlier in February. The Indictment, seen by FinanceFeeds, alleges that Caruso and Salter operated Zima Digital Assets, a purported cryptocurrency investment fund, which, in reality, was a fraud. Caruso and Salter received more than $9 million from victims but the funds were not used for the purchase of cryptocurrency or other “blockchain based assets”. Instead, 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 extravagant items, such as private jets, vacations, luxury car rentals, and casino gambling.

The Indictment enlists a raft of misrepresentations made by the duo behind Zima Digital Assets, including false statements in the contracts with the investors, as well as false claims in direct messages to investors.

If convicted of one or more of the offenses in the Indictment (that is, conspiracy to commit wire fraud and money laundering), the defendants will also have to forfeit all property derived from the offenses.

Those who believe they may have invested money with Caruso or Salter, or their alleged cryptocurrency investment fund, Zima Digital Assets, are advised to contact Special Agent Lamerson or Special Agent Roper at the U.S. Secret Service, Phoenix Field Office, via telephone at (602) 640-5580.