Case 2:20-cr-00165-JJT Document 49 Filed 04/06/20 Page 1 of 12

1 MICHAEL BAILEY
United States Attorney
2 District of Arizona
ANDREW C. STONE
3 Assistant United States Attorney
Arizona State Bar No. 026543
4 JAMES R. KNAPP
Assistant U.S. Attorney
5 Arizona State Bar No. 021166
Two Renaissance Square
6 40 N. Central Ave., Suite 1800
Phoenix, Arizona 85004
7 Telephone: 602-514-7500
Email: andrew.stone@usdoj.gov
8 Email: james.knapp2@usdoj.gov
Attorneys for Plaintiff
9
10 IN THE UNITED STATES DISTRICT COURT
11 FOR THE DISTRICT OF ARIZONA
12
United States of America, No. CR-20-00165-001-PHX-JJT
13
Plaintiff,
14 UNITED STATES’ RESPONSE TO
vs. DEFENDANT’S MOTION TO REOPEN
15 DETENTION HEARING
16 John Michael Caruso,
17 Defendant.
18 Defendant’s emergency motion to reopen his detention hearing should be denied.
19 Defendant’s concerns over a potential COVID-19 outbreak at his CoreCivic detention
20 facility do not undermine the propriety of detention under 18 U.S.C. § 3142(e) nor justify
21 temporary release under 18 U.S.C. § 3142(i). Defendant remains a serious flight risk and
22 a danger to the community, and CoreCivic has implemented numerous preventative and
23 treatment-based protocols to address any COVID-19 cases should they arise.
24 Defendant’s motion also attempts to bootstrap an untimely de novo review of the
25 Court’s Detention Order. Defendant blew his deadline for filing objections to the
26 Detention Order by six weeks, and the Court need not burden itself with reanalyzing the
27 identical arguments in support of Defendant’s release that it properly rejected two months
28 ago. Even if the Court did reanalyze these issues, the Court’s reasoning supporting
 Case 2:20-cr-00165-JJT Document 49 Filed 04/06/20 Page 2 of 12

1 Defendant’s pretrial detention has only been fortified since it issued the Detention Order
2 on February 7, 2020. Specifically, (a) Defendant has now been indicted and charged with
3 17 separate felonies, rather than facing a one-count conspiracy complaint, (b) the loss
4 amount attributed to Defendant’s conduct has increased from $7.5 million to over $15
5 million, and (c) both Defendant (from custody) and Defendant’s father have made
6 numerous contacts with victims in an effort to garner support. No conditions or
7 combinations of conditions will assure the appearance of the defendant as required, or the
8 safety of any other person and the community. Defendant’s motion should be denied.
9 MEMORANDUM OF POINTS AND AUTHORITIES
10 I. Factual and Procedural Background
11 A. Defendant’s Criminal Scheme
12 Defendant operated a Ponzi scheme where he stole over $15 million (and counting)
13 from victims. (Declaration of Special Agent James Lamerson, attached as Exhibit A, at
14 ¶ 2.) He, with his co-defendant Zachary Salter, owned Zima Digital Assets, a company
15 that—according to them—managed a cryptocurrency investment fund. (Doc. 30 at ¶ 1.)
16 In reality, Defendants made no cryptocurrency purchases and, besides returning
17 approximately $2 million of the victim funds to early investors as purported investment
18 profits, spent the money on themselves, including flying on private jets, taking exotic
19 vacations, driving luxury cars, gambling (and losing) over a $1 million at Las Vegas
20 casinos, and living in two multi-million dollar mansions. (Id. at ¶ 3.) Defendants stole
21 from the victims to enrich themselves.
22 Defendant represented himself as the “Kryp+0 K!ng.” (Doc. 30 at ¶¶ 3-10.)
23 Defendant told investors, both in direct conversations and through media publications, that
24 he “had a pulse on the digital asset markets since 2011 being early bitcoin investors” and
25 that “[b]etween 2009 and 2017, [his] wealth spiked to more than $100 million.” (Id. at
26 ¶¶ 8-9.) In reality, in 2016 and 2017, Defendant was serving a prison sentence in Florida
27 for extortion after violating his probation by committing further felonies. (Doc. 9 at 4.)
28 There’s no evidence Defendant traded cryptocurrency at all, much less that he was “the

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1 world’s greatest cryptocurrency trader of all time.” (Doc. 30 at ¶ 7.) In November 2017,
2 Defendant was released from prison and less than two years later he bamboozled his
3 victims into believing that he was the “Michael Jordan” of cryptocurrency trading. (Doc.
4 30 at ¶ 7.) Though Defendant is nowhere near the best “cryptocurrency trader” in the
5 world, he has proven skilled and adept at lying to separate people from their money.
6 B. Detention Hearing
7 On February 7, 2020, this Court held a detention hearing for Defendant. At that
8 time, the government had only charged Defendant with a one-count conspiracy complaint.
9 (Doc. 3.) At the detention hearing, Defendant argued that he was neither a flight risk nor
10 a danger to the community and should be released to the third party custody of Greg Price.
11 (Doc. 23 at 2.) Mr. Price offered to post his personal residence as collateral to secure
12 Defendant’s appearance, which he valued at $140,000. (Id.)
13 This Court rejected Defendant’s arguments. (Doc. 27.) The Court found that
14 “Defendant has a record of dishonesty, as evidenced by his criminal record, and by the
15 statements he made to the interviewing U.S. Pretrial Services Officer.” (Id. at 2.) Further,
16 the Court concluded that Defendant was both a flight risk and a danger to the community,
17 writing:
18 The Court finds, based upon the above, that the Government has presented,
19 by a preponderance of the evidence, that Defendant poses a serious flight
risk, and that, by clear and convincing evidence, that Defendant poses a
20 danger to the community. The Defendant has committed several crimes while
21 under the supervision of courts. There is evidence that he has, in a relatively
short period of time, received millions of dollars, travelled abroad, gambled
22 a significant amount of money, and has a track record of dishonesty. He has
23 been convicted of violent felonies (extortion threats) and five separate felony
convictions for fraud-related offenses. He has either been on probation or in
24 prison nearly continuously from the time he was 18 years of age, and now is
25 accused of serious financial fraud.

26 (Id. at 3.)
27 C. Indictment

28 On February 18, 2020, a grand jury returned an indictment against Defendants that

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1 charged Caruso with 17 felonies that included counts for conspiracy, wire fraud, and money
2 laundering. (Doc. 30.) The indictment alleges that Defendant’s scheme defrauded victims
3 out of at least $9 million. (Id. at ¶ 3.) Since that time, law enforcement agents have had
4 the opportunity to interview victims and through these interviews, the loss amount
5 attributed to Defendants’ scheme has increased to over $15 million. (Ex. At ¶ 2.)
6 Defendant’s exposure and potential prison time has only increased since this Court ordered
7 him detained in early February.
8 D. Defendant’s Emergency Motion to Reopen Detention
9 On April 1, 2020, Defendant filed an emergency motion to reopen his detention
10 hearing. (Doc. 47.) Defendant makes two arguments: first, that he should be released
11 based on the COVID-19 pandemic; and, second, that this Court got it wrong in February
12 and Defendant deserves to be released even without the global health considerations. In
13 making this second argument, Defendant largely parrots his original brief in opposition to
14 detention. (Compare Doc. 47 at 10-15 with Doc. 23 at 3-7.) Besides the presence of
15 COVID-19, the only argument Defendant has changed since February is that he now
16 suggests Mr. Price is able to offer $160,000 more to secure an appearance bond. (Doc. 47
17 at 16.) This money derives from equity in Mr. Price’s home and a retirement account. (Id.)
18 Defendant also represents that Mr. Price is an individual who is not connected with either
19 Defendant or Defendant’s father: “Mr. Price was business partners with Mr. Caruso’s
20 father from December 2018 until July 2019, long prior to Mr. Caruso’s arrest in late
21 January.” (Id.) There is reason to doubt this assertion.
22 Mr. Price and Defendant’s father—John Caruso Sr. (“Caruso Sr.”)—are listed as
23 the directors and incorporators of a business named Art in Motion Auto Detailing
24 Corporation. (Ex. A at ¶ 5.) The formation date for the company is December 27, 2018.
25 The purpose of the business is listed as “cleaning and polishing automobiles.” During
26 Defendant’s scheme, he sent Art in Motion over $20,000. (Id.) All that money derived
27 from the victims of Defendants’ Ponzi scheme. Further, and perhaps most importantly, on
28 April 2, 2020, Caruso Sr. confirmed to his parole officer that Mr. Price is still his business

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1 partner for Art in Motion and he previously described Mr. Price as a 50% partner. (Id.)
2 E. Defendant’s Contacts with Victims
3 In the past two months, Defendant has contacted numerous victims, through emails
4 and phone calls from jail, or through his father as a proxy. (Ex. A at ¶ 4.) According to
5 one victim-investor, Defendant called and emailed multiple times from pretrial detention,
6 assuring the victim that “the allegations are baseless,” “this will all go away in the next six
7 months,” and to “give his love and thoughts to people in our circle.” (Id.)
8 Caruso Sr., who was a co-defendant in the extortion case and has an extensive
9 criminal history, contacted at least six victim-witnesses since Defendant’s arrest. (Id.)
10 During these contacts, Caruso Sr. reportedly made veiled threats, including that he has ties
11 to organized crime in New York, including a close relationship with a high-ranking
12 member of the mafia. (Id.) He has also made the following threatening statements to
13 victim-witnesses:
14 - “Just so you know, I’m taking notes, who’s around and supporting him, and
15 who’s not anymore;”
16 - “[Defendant] wants everyone to know they are going to be paid back;”
17 - “He’s got the money;”
18 - “Who is out there talking shit? Who’s not supporting John?”; and
19 - “Johnny sends his regards.”
20 (Id.)
21 II. Law and Argument
22 A defendant must be detained pending trial where “no condition or combination of
23 conditions will reasonably assure the appearance of the person as required and the safety
24 of any other person and the community.” 18 U.S.C. § 3142(e)(1). In making an
25 individualized detention determination, a court must consider (1) the nature and
26 circumstances of the offense; (2) the weight of the evidence; (3) the history and
27 characteristics of the person, including character, physical and mental condition, family
28 ties, employment, financial resources, length of residence in the community, community

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1 ties, past conduct, history relating to drug or alcohol abuse, criminal history, and record
2 concerning appearance at court proceedings; and (4) the nature and seriousness of the
3 danger to the community that would be posed by the person’s release. 18 U.S.C. § 3142(g);
4 United States v. Winsor, 785 F.2d 755, 757 (9th Cir. 1986).
5 The court may reopen detention proceedings before trial if there is new information
6 “that has a material bearing on the issue whether there are conditions of release that will
7 reasonably assure the appearance of such person as required and the safety of any other
8 people and the community.” 18 U.S.C. § 3142(f)(2).
9 Further, after a defendant has been detained, a court “may, by subsequent order,
10 permit the temporary release of the person, in the custody of a United States marshal or
11 another appropriate person, to the extent that the judicial officer determines such release to
12 be necessary for preparation of the person’s defense or for another compelling reason.” 18
13 U.S.C. § 3142(i). The defendant bears the burden of showing release is necessary under
14 § 3142(i). United States v. Dupree, 833 F. Supp. 2d 241, 246 (E.D.N.Y. 2011). Release
15 under § 3142(i) is intended for “extraordinary circumstances,” which are exceedingly rare.
16 United States v. Rebollo-Andino, 312 Fed. App’x. 346, 348 (1st Cir. 2009).
17 A. Defendant’s Continued Detention is Appropriate under 18 U.S.C. § 3142
18 Assuming the COVID-19 pandemic is a changed circumstance that may be
19 considered on a case-by-case basis under § 3142(f)(2), detention nonetheless remains
20 appropriate under all the facts and circumstances of this case. Nothing about COVID-19
21 materially alters this Court’s individualized determination that there are no conditions of
22 release sufficient to assure Defendant’s presence for these proceedings and the safety of
23 the community. There has been no change to the nature and circumstance of the offenses,
24 the weight of the evidence, Defendant’s history and characteristics, or the nature and
25 seriousness of the danger Defendant presents to the community in general. Cf. United
26 States v. Martin, 2020 WL 1274857, at *3 (D. Md. Mar. 17, 2020) (denying appeal of
27 detention order by inmate with asthma, high blood pressure, and diabetes and explaining
28 that “as concerning as the COVID-19 pandemic is,” the court’s consideration “must in the

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1 first instance be an individualized assessment of the factors identified by the Bail Reform
2 Act.”).
3 To be sure, the Bail Reform Act instructs the Court to consider a defendant’s own
4 “physical and mental health,” 18 U.S.C. § 3142(g)(3)(A), but the general existence of a
5 pandemic does not have significant bearing on that assessment. Rather, the Court must
6 made an individualized assessment that considers Defendant’s health as one of a multitude
7 of factors under the statute. 18 U.S.C. § 3142(g). Here, Defendant is a young man without
8 any underlying health conditions.1 (Doc. 9 at 3.) And, while it’s true that anyone can
9 contract COVID-19, all indications are that the virus typically has a more severe impact on
10 older people and those who are dealing with other health complications, none of which
11 appear to ail Defendant.2
12 For this reason, Defendant’s case is very different from United States v. Scarpa,
13 which Defendant cites in support of his release request. (Doc. 47 at 8.) In Scarpa, the
14 district court granted pretrial release to a terminally-ill defendant who was expected to die
15 of AIDS within two months, had been shot in the face, and required special feedings
16 because he did not have a stomach. 815 F. Supp. 88, 90 (E.D.N.Y. 1993). The Scarpa
17 court found that the detention facility could not provide humane care under the
18 circumstances and released the defendant to a hospital, where he was required to pay the
19 full costs of at least two guards at all times. Id. at 93. Defendant, in contrast, has not
20 alleged that he is currently seriously ill nor that CoreCivic has failed to meet his medical
21 needs.
22
1
23 Defendant told Pretrial Services that he suffers from “eye and chronic back issues”
and “may possibly have skin cancer on the lip.” (Doc. 9 at 3.) Defendant’s mother, on the
24 other hand, “reported the defendant’s physical health is good as he is not under the care of
a physician nor taking any medication that she is aware of. She further noted the defendant
25 has no ailments she is aware of.” (Id.)
2
26 (See https://www.azcentral.com/story/news/local/arizona-
health/2020/04/06/coronavirus-covid-19-arizona-update-monday-april-6-cases-2-456-65-
27 known-deaths/2952287001/, reporting that as of the morning of April 6, 2020, 31 people
had died from COVID-19 in Maricopa County, of those seven were aged 45-64 and 24
28 were over age 65 and “the likelihood of being hospitalized or in the ICU increases with
age”.)

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1 Despite allusions to the contrary, CoreCivic has protocols in place regarding

2 COVID-19 with respect to: prevention, identification, treatment, surveillance, isolation,
3 testing and protecting the uninfected.3 Among the measures CoreCivic has implemented
4 to minimize the risk of COVID-19 transmission into and within its facilities are:
5
(1) New inmates are being screened by having a full set of vital signs taken,
6 which includes checking temperatures, assessing possible symptoms (flu-like
symptoms, coughing) and “chronic care” needs, along with completing an in-depth
7
health inquiry. Based on this intake screening, new inmates will be quarantined, if
8 necessary.
9
(2) Nurses are screening inmates in the cellblocks in Phoenix and Tucson: testing
10 temperatures, checking whether an inmate had an upper respiratory infection within
the last 14 days and inquiring about known exposures. If they determine someone
11 poses a risk, that inmate will be masked and possibly quarantined.
12
(3) Based on guidance from the Centers for Disease Control and Prevention
13 (“CDC”), CoreCivic has identified a “high risk” watch list of inmates. The facility
14 will be keeping a close eye on these inmates. Some of these “high risk” inmates
may already be in the infirmary. An inmate will not be moved just because s/he is
15 identified as “high risk.” For example, just because an inmate is HIV positive, s/he
16 may not be included on the list or isolated. Instead, the decision is based on the
individual inmate’s current health situation.
17
18 (4) CoreCivic has increased sanitization measures to be more comprehensive
and more frequent in accordance with CDC guidelines.
19
(5) All inmates are being instructed on CDC guidelines to prevent transmission
20
of COVID-19, including the importance of frequent hand washing, covering coughs,
21 not touching the face, etc.
22
(6) Inmates are being tested before they leave a facility to go to court, and if they
23 register a temperature greater than 100.4 F, they are not transported to court.
24 (7) CoreCivic is following CDC recommendations. They are coordinating with
25 local health and fire departments and have contingency plans in place with local
hospitals.
26
3
27 On Monday, March 30, 2020, Defendant’s counsel sent an email to CoreCivic that
asked 42 questions about the detention center’s protocols in dealing with COVID-19.
28 (Doc. 47-1 at 2-3.) Apparently, CoreCivic didn’t respond by Wednesday when Defendant
filed his emergency motion.

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1 Taken together, these measures are designed to sharply mitigate the risks of
2 COVID-19 transmission. See Order Denying Defendant’s Motion for Release from
3 Custody Pending Disposition or Immediate Disposition, United States v. Caddo, D. Ariz.
4 No. CR-08341-002-PCT-JJT, Doc. No. 174 at 2 (denying motion for release pending
5 supervised release disposition due to COVID-19 and finding “the CoreCivic and BOP
6 protocols for warning sign monitoring, examination, quarantining, isolation and other
7 health procedures they have in place are comparable, if not superior, to what Defendant
8 would face out of custody. CoreCivic’s, BOP’s and the Marshal’s procedures have not
9 been shown to be unreasonable under the circumstances.”).
10 This Court must make an “individualized assessment of the factors identified by the
11 Bail Reform Act.” United States v. Martin, No. 19-140-13, 2020 WL 1274857, at *3 (D.
12 Md. Mar. 17, 2020) (denying release pending appeal on COVID-19 grounds). Given this
13 “individualized assessment,” none of the cases cited by Defendant offer him support
14 because each has distinguishing facts. See, e.g., Xochihua-Jaimes v. Barr, 2020 WL
15 1429877, at *1 (9th Cir. March 24, 2020) (releasing a detainee pending final disposition of
16 removal proceedings by the Ninth Circuit—not an individual facing federal felony
17 charges); In the Matter of Extradition of Manrique, 2020 WL 1307109, at *1 (N.D. Cal.
18 March 19, 2020) (court released a 74-year-old who was fighting his extradition to Peru, in
19 part because it served the United States’ treaty obligation to Peru); United States v.
20 Garlock, 2020 WL 1439980, at *1 (N.D. Cal. March 25, 2020) (delaying defendant’s self-
21 surrender date to September 1, 2020, because defendant had been sentenced to 12 months
22 and one day in prison, but he was on pretrial release, which “reflects a determination by a
23 magistrate judge that he is neither a danger to the community nor a flight risk”); United
24 States v. Jaffee, No. 19-cr-88 (D.D.C. Mar. 26, 2020) (releasing defendant who, based on
25 the evidence, was facing charges for marijuana distribution and felon-in-possession, but
26 the latter charge was only supported on a constructive possession theory, further
27 defendant’s criminal history was dated). None of these cases provide support for
28 Defendant’s argument that he should be released. He’s been charged with 17 felonies, he’s

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1 young and healthy, he’s facing a guideline sentence of over ten years in prison, and his
2 criminal history is far from dated. In short, the factors under § 3142(g) weigh heavily in
3 favor of detention as Defendant is both a flight risk and a danger to the community.
4 B. Defendant is Ineligible for Temporary Release Under 18 U.S.C. § 3142(i)
5 For the same reasons, Defendant is ineligible for temporary release under 18 U.S.C.
6 § 3142(i). Defendant seeks indefinite rather than temporary release from custody, a remedy
7 unavailable under § 3142(i). Moreover, he has not shown an extraordinary circumstance
8 justifying release of any duration. As outlined above, CoreCivic has taken reasonable steps
9 to avoid or mitigate the virus’s spread. Defendant provides no evidence that those
10 protocols or the medical services available to him are insufficient.
11 Defendant argues that release under § 3142(i) is justified to permit trial preparation.
12 Trial, however, is currently scheduled for September 1, 2020, and while trial preparation
13 is important, Defendant doesn’t adequately explain why he needs to be released to help his
14 attorneys prepare. Further, Defendant’s argument that this case “is extremely complex” is
15 hyperbole. The case is straightforward. Defendant lied to victims about his ability to trade
16 cryptocurrency and instead of investing his victims’ money like he (and his co-defendant)
17 said they would, they spent the money to live like rock stars. He should remain detained.
18 C. The Court Need Not Review Defendant’s Argument that He Should Be
19 Released Even in the Absence of COVID-19
20 Defendant attempts to bootstrap an untimely de novo review of the Court’s original
21 Detention Order. If Defendant wanted to challenge the Court’s order, he needed to file
22 objections within 14 days after its issuance. See Rule 59(a) (failure to object within 14
23 days of magistrate judge’s order waives a party’s right to review); United States v. Tooze,
24 236 F.R.D. 442, 445-446 (D. Ariz. 2006) (right to appeal a magistrate judge’s detention
25 order is lost if Rule 59(a) is not complied with). Defendant’s second half of his emergency
26 motion is simply a rehash of his original motion (Doc. 23) opposing detention. This Court
27 correctly rejected those arguments two months ago and need not reanalyze its findings.
28 (Doc. 27.)

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1 Even if the Court does conduct a de novo review, it will reach the same outcome.
2 Indeed, the facts supporting Defendant’s detention have strengthened. The only fact that
3 has arguably improved for Defendant since the original detention hearing is that he has
4 apparently found an additional $160,000 to post as an appearance bond. But this fact is
5 outweighed by all the factors that are now worse for him than they were two months ago.
6 Specifically, (a) he’s facing more serious charges, (b) the loss amount has increased by
7 over $6 million, and (c) he’s demonstrated a proclivity for contacting victims, which the
8 Court can surmise will only become more frequent if Defendant’s released. Further, when
9 Defendant’s relationship with Mr. Price is examined, it appears that Mr. Price may have
10 benefitted from the fraudulent scheme. Mr. Price appears to continue to operate Art in
11 Motion with Caruso Sr. (Ex. A at ¶ 5.) And that company received $20,000 of victims’
12 funds. The close ties between Mr. Price and Caruso Sr., and the apparent
13 misrepresentations about Mr. Price’s role with Art in Motion, are enough to suspect the
14 arrangement proposed by Defendant in his emergency motion is not above board.
15 Finally, as Special Agent Lamerson’s declaration makes clear, although the majority
16 of investor funds have been traced, investigators continue to identify assets for Caruso.
17 (Ex. A at ¶ 2.) The government is still not confident it has identified all victim funds that
18 were received by Zima Digital Assets. This continues to leave open the possibility that
19 Defendant has money located somewhere that would give him the ability to abscond and
20 live elsewhere.
21 Defendant remains a flight risk and a danger to the community. He should remain
22 detained.
23 Respectfully submitted this 6th day of April, 2020.
24 MICHAEL BAILEY
United States Attorney
25 District of Arizona
26 s/Andrew C. Stone
ANDREW C. STONE
27 JAMES R. KNAPP
Assistant U.S. Attorneys
28

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CERTIFICATE OF SERVICE
1
I hereby certify that on this 6th day of April, 2020, I electronically transmitted the
2
attached document to the Clerk’s Office using the CM/ECF System for filing and
3
transmittal of a Notice of Electronic Filing to the applicable CM/ECF registrants.
4
5 s/Marjorie Dieckman
6 U.S. Attorney’s Office
7
8
9
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12
13
14
15
16
17
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EXHIBIT A
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Declaration of Special Agent James Lamerson

1. I am a Special Agent of the U.S. Secret Service, and I am familiar with the facts
relating to United States v. John Michael Caruso and Zachary Salter, CR-20-
0165-PHX-JJT.

2. Based on additional investigation since the grand jury returned an Indictment

charging Caruso and Salter with fraud and money-laundering offenses, the net loss
to victims of the Zima Digital Assets investment fraud scheme now appears to
exceed $15 million.

a. The investigation has revealed no evidence that the alleged Zima Digital
Assets cryptocurrency hedge fund exists.

b. Investigators continue to find evidence of Caruso’s transfer of investor

funds, including just over $1 million to purchase stock in a synthetic
diamond company, a $500,000 cashier’s check to fabricate a custom car,
$100,000 loaned to a financial advisor, $100,000 loaned to a real estate
startup company (with $30,000 still outstanding on the loan), $50,000
transferred to a law firm, and a $24,000 retainer paid to a private security
company. Although the majority of investor funds have been traced,
investigators continue to identify assets for Caruso.

3. Caruso’s criminal history includes acts of threatened violence and intimidation.

According to the Collier County Sheriff’s office records, Caruso was involved in
an extortion scheme with his father in which a victim was threatened with having
his hands and penis cut off if he did not pay $200,000. Caruso was convicted and
served time in prison for his role. More recently, Caruso was investigated by the
Scottsdale Police Department for an alleged murder-for-hire scheme against a
prosecutor.

4. Caruso and his father, John Caruso Sr.—who were codefendants in previous
criminal cases—have been repeatedly contacting victims and witnesses associated
with Zima Digital Assets since Caruso’s arrest.

a. According to one victim investor, Caruso called and emailed multiple times
from pretrial detention, assuring the victim that “the allegations are baseless,”
“this will all go away in the next six months,” and to “give his love and
thoughts to people in our circle.”

b. At least six victims/witnesses have been contacted by Caruso’s father, John

Caruso Sr., since Caruso’s arrest. During these contacts, Caruso Sr.
reportedly made veiled threats. Caruso Sr. has told victims/witnesses that
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he has ties to organized crime in New York, including a high-ranking

member of the mafia. He has also made threatening statements to
victims/witnesses, such as “Just so you know, I’m taking notes, who’s
around and supporting him, and who’s not anymore”; that Caruso “wants
everyone to know they are going to be paid back” and “He’s got the
money”; asking “who is out there talking shit? Who’s not supporting
John?”; and relaying that “Johnny sends his regards.”

c. I know from reviewing court records that Caruso Sr. has extensive criminal
history. Victims/witnesses in the case have told me Caruso talked about his
father’s criminal history.

5. Greg Price, who has pledged $300,000 in collateral to secure Caruso’s release on
bond, is a business associate of Caruso Sr. and their business received some of the
victim investor funds.

a. According to Arizona Corporation Commission records, Caruso Sr. and

Price are listed as the directors and incorporators of Art in Motion Auto
Detailing, formed in December 2018. The formation date for the company
is December 27, 2018. The purpose of the business is listed as “cleaning
and polishing automobiles.”

b. On April 2, 2020, Caruso Sr. confirmed to his parole officer that Price is
still his business partner for Art in Motion and he previously described
Price as a 50% partner.

c. Text messages on Caruso’s cell phone show that Caruso Sr. regularly asked
Caruso for money during the Zima Digital Assets fraud scheme, and that
Caruso agreed to send Caruso Sr. money.

d. Financial records show that Caruso transferred at least $20,000 obtained

from Zima Digital Assets victim investors to Art in Motion, including
regular payments to Art in Motion and bill payments on the behalf of Art in
Motion.

6. I declare under penalty of perjury that the foregoing is true and correct.

Executed on: April 6, 2020

_____________________________________ __

James Lamerson, USSS Special Agent

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