Court deals another blow to Zima Digital Assets operator John Caruso

John Michael Caruso, one of the operators of fraudulent cryptocurrency scheme Zima Digital Assets, has suffered another defeat in his attempt to secure temporary release, as the Appeals Court has sided with the District Court that he should remain in detention.

According to a decision delivered by the Court of Appeals for the Ninth Circuit, the ruling of the Arizona District Court that the defendant has to stay detained is affirmed.

The Court of Appeals found that the district court did not abuse its discretion in finding that temporary release was not necessary for the preparation of appellant’s defense. On appeal, appellant has moved to supplement the record with evidence showing that the COVID-19 pandemic has continued to spread at FCC Florence and that the quarantine of his pod has been extended. The Appeals Court cannot address these new facts in the first instance and appellant should bring these facts to the attention of the district court, the ruling says.

Caruso, who is also known as Kryp+0 K!ng or “crypto king”, is charged by criminal complaint with one count of Conspiracy to Commit the crimes of Wire Fraud and Money Laundering. In the complaint, he is charged with carrying out a Ponzi “cryptocurrency” scheme that defrauded over 100 victims of at least $7.5 million. The offense is alleged to have been committed in a relatively short period of time, since June 2018. During this time, it is alleged by the Government that bank records and casino records establish that Caruso lived an extravagant lifestyle, to include taking 30 trips to Las Vegas. He has flown on private jets to numerous domestic and overseas destinations.

The defendant has seven prior felony convictions, beginning with two counts of “Extortion Threats” at the age of 18, committed in Collier County, Florida. Although he received probation for those offenses, he violated probation on three different occasions, two times for committing new crimes, and once for an unknown reason in 2016, after which he was sentenced to three years in prison. Defendant was released from prison in November, 2017, just months before he is alleged to have committed the present offense.

Caruso was also convicted of two counts of felony Theft–Obtain by Misrepresentation, in Scottsdale, Arizona, for which he ultimately received seven years’ probation. While on probation, he was convicted of felony Forgery–Offers Forged Instruments, in Scottsdale, Arizona, for which he received a year in jail and five years of probation. Thereafter, and also while on probation, he was convicted of two counts of Fraudulent Schemes/Artifices, in Maricopa County, Arizona, for which he received 90 days custody and five years of probation.