SCOTTSDALE, Ariz. — Two Paradise Valley men have been arrested in connection to an alleged Ponzi scheme the two are accused of operating in the Scottsdale area.
28-year-old John Michael Caruso and 27-year-old Zachary Salter were taken into custody on January 30, 2020, accused of wire fraud and money laundering.
According to the criminal complaint paperwork, Caruso and Salter ran a business called Zima Digital Assets LLC. The private investment firm deals in cryptocurrency investments, something investigators allege never happened.
Caruso and Salter are accused of taking more than $7.5 million from investors while only paying out $1.9 million in returns.
The rest of the money, according to the complaint, went toward luxury homes, exotic cars and lavish trips to Las Vegas.
Caruso and Salter reportedly never invested any of the money in cryptocurrency. Instead, they would use one investor’s money to pay a return on another victim’s investment.
A background investigation on John Caruso performed by the Secret Service, alleges that Caruso comes from a “criminally oriented family, steeped in traditions of enrichment through illegal means.”
The complaint states that Caruso has been arrested on various crimes across the country, including extortion, fraud, forgery and money laundering.
Among Caruso’s and Salter’s alleged victims include elderly investors, with one 76-year-old investor losing $200,000 and an 86-year-old investor losing $60,000.
Major League Baseball players and their families were also bilked in the alleged Ponzi scheme.
The investigation revealed that Caruso took part in an event called “Campfire Summit Athletes and Family”.
“Further review revealed several of the panelists who presented were associated with Major League Baseball," said James Lamerson – a special agent with the United States Secret Service – in his criminal complaint. “Numerous victims in the investigation have been identified as former MLB players and their families.”
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 at (602) 640-5580.
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