By XcelToken on The CapitalTwo men charged over an alleged crypto trading Ponzi scheme lured investors, including professional baseball players, with social media posts boasting about their luxurious lifestyles.On January 30, the Secret Service arrested the Arizona-based founders of Zima Digital Assets, John Michael Caruso, aged 28, and Zachary Salter, aged 27.Caruso commonly refers to himself as “Krypto King” in social media posts and claims he’s been a cryptocurrency investor since 2012. He has a criminal history and was last released from prison in late 2017.Salter is an aspiring R&B singer who releases music under the name “Sweet Talker.”Despite claiming no taxable income, the pair’s extravagant social media posts about their luxury good purchases helped draw in new investors.They were charged with conspiracy to commit wire fraud and money laundering.The complaint alleges that Salter and Caruso defrauded more than 90 investors out of at least $7.5 million since June 2018. That figure includes an unknown number of former pro baseball players and senior citizens. Zima is still actively taking investments so the total amount lost is unknown.Zima’s website claims the firm “operates various private funds focusing on investments in cutting-edge technologies, including crypto and other blockchain-based assets,” and Caruso and Salter were featured as successful crypto investors in Forbes, Entrepreneur, and Cigar Aficionado.A press release that looks an awful lot like an ordinary Business Insider story referred to Caruso as “the Michael Jordan of algorithmic cryptocurrency trading.”Forensic accountants believe that none of the money Zima took from its would-be investors was actually invested in cryptocurrency. The pair instead used the money to live it up, spending $350,000 on luxury car rentals and another $610,000 on private jets, a mansion rental (dubbed “the Krypto Castle”), as well as a variety of jewellery and designer clothing.Caruso had a fleet of luxury cars including a Lamborghini, and the pair lost $830,000 within 134 hours of gambling at Las Vegas casinos.They frequently posted about their lifestyles on Instagram and Facebook, including a video suggesting Zima had $1 billion in assets under management. They used direct messaging on the platforms to contact potential investors.Their victims include former Major League Baseball players and their families, along with a 76-year-old man who lost $200,000 and an 86 year old who lost $60,000.The investigation found that $1.9 million of the funds were paid back to investors in the form of “returns.”“The pattern of investor payments against investor payouts with no investment of funds is consistent with … a Ponzi scheme,” court filings show.The Capitalhttps://medium.com/media/3b6b127891c5c8711ad105e61d6cc81f/hrefCrypto Ponzi Scheme Lures Unknown Number Of Baseball Players was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.