Zachary Salter, the co-founder of Zima Digital Assets aslope 28-yr-onetime John Caruso, has pleaded not guilty to charges of money laundering and conspiracy to commit wire fraud in his arraignment in Arizona on March four.

The criminal indictment alleges that the pair ran a purported cryptocurrency investment scheme that was used to defraud their customers of more than $9 one thousand thousand in a classic Ponzi scheme.

Approximately $1.nine million in deposits were cycled back to early on investors every bit supposed investment returns. The purported profits served to validate the scheme, contributing to a further wave of deposits.

The remaining $7 million was spent lavishly — on vacations, luxury car rentals, individual jets, and casino gambling. Despite flaunting their lavish lifestyle on social media, the pair claimed no taxable income.

The pair defrauded more than than 90 investors, including elderly citizens and former-professional baseball players. They were arrested on January. 30.

Both co-founders plead non guilty

The indictment includes allegations of false statements in investor contracts and misrepresentations in directly messages to clients.

Caruso also pleaded non guilty during his arraignment on February. 26. Caruso has a criminal tape and was final released from prison during 2022.

Both men volition now face up a jury trial on July 4, 2022. If convicted of either charge, Salter and Caruso will take to forfeit all property derived through the criminal scheme.

Scammers lose $830,000 in investor funds at casinos

Post-obit a hearing in early February, the prosecution declared that "there is no evidence whatever of the investment funds that have been provided to Caruso and Salter have gone to any cryptocurrency/digital nugget investment, or to any investment of any kind, as fraudulently misrepresented by both Caruso and Salter."

It was heard that the pair used investors' funds to rack upward $830,000 in gambling losses, $670,000 in credit card expenses, $540,000 in private jet and luxury vehicle rentals, and $150,000 in rent for a 20,000-square-pes mansion.

At the time of the February hearing, Zima Digital Assets was nevertheless actively receiving investor funds.