Zima Digital Assets Operator to Plead Guilty in Cryptocurrency Fraud Case

News | April 22, 2024 By:

On Monday, April 8, 2024, a plea agreement was filed in the United States District Court for the District of Arizona in the case of USA v. Caruso et al. The agreement was reached between the United States Attorney’s Office and the defendant, John Michael Caruso.

Caruso was charged with 17 counts of money laundering, wire fraud, and transactional money laundering related to his operation of Zima Digital Assets, which purported to invest in digital currencies like bitcoin and blockchain companies. Prosecutors say Caruso made false claims about Zima Digital Assets’ operations and regulatory compliance to attract over $11.5 million from investors between 2018 and 2020.

Under the terms of the plea agreement, Caruso agreed to plead guilty to one count of transactional money laundering over $10,000, a class C felony. In exchange, prosecutors agreed to drop the remaining 16 charges. The agreement suggests a sentencing range of time served to 84 months in prison, though the judge will have discretion. Caruso also agreed to make full restitution to victims of up to $11.5 million.

The document outlines how Caruso allegedly made misleading statements in marketing materials for Zima Digital Assets about being regulated by FINRA and having analysts based overseas. Prosecutors say he did not actually use all of the invested funds as promised and acknowledge one transaction of withdrawing $262,000 from a bank account, knowing over $10,000 of it derived from the alleged fraud.

If accepted by the court, the plea deal would see Caruso waive his right to appeal and all trial rights. He stipulates to a loss amount under federal guidelines of $9.5-25 million and agrees to forfeit assets seized totaling over $753,000. Caruso’s lawyers and prosecutors will jointly recommend a two-level reduction at sentencing if he accepts responsibility.

Please contact BlockTribune for access to a copy of this filing.