BY ANDREAS YILMA
NAUGATUCK — A former borough resident has been charged with more than a dozen counts stemming from an alleged investment fraud scheme.
Rafael Muzzi, 27, a citizen of Brazil who formerly lived in Naugatuck, was charged in a 14-count indictment with fraud and money laundering offenses from an alleged fraud scheme in which he defrauded 12 victims out of a total of $550,000, according to a news release from the U.S. Attorney’s Office.
Vanessa Roberts Avery, the United States Attorney for the District of Connecticut, and Robert Fuller, special agent in charge of the New Haven Division of the Federal Bureau of Investigation, announced the indictment May 4 after Muzzi was arrested in Panama on April 1.
Muzzi appeared in Hartford federal court on April 28 and pleaded not guilty to the charges in the indictment. He was ordered to be detained.
The charges include 12 counts of wire fraud and two counts of money laundering.
In 2018 and 2019, Muzzi used two entities he formed — Solace Investments and Asseno — where he allegedly persuaded victim-investors to provide him with funds based on the depiction that he would use the funds for trading currencies in foreign exchange markets by using a trading software program that he developed, according to the federal law enforcement officials.
“Muzzi failed to invest a substantial portion of invested funds as he represented, and instead diverted those funds for his own personal use, and to pay other individuals who had invested with him,” the news release states.
The indictment also alleges that Muzzi sent victims fake monthly account statements that falsely exaggerated their return on investment and their account balances, the release states.
The misrepresentations convinced some victim-investors to provide Muzzi with more investment funds.
He also gave victims purported tax documents reflecting fabricated investment profits which caused victims to report and pay taxes on profits that they had not realized.
After victim complaints, the state of Connecticut’s Department of Banking investigated Muzzi’s behavior, issued orders that found Muzzi and Solace Investments had violated state securities laws and ordered for a full restitution to victims as well as a $300,000 fine.
Muzzi traveled to Brazil on Sept. 6, 2020, and never returned to the U.S. A federal grand jury in New Haven charged Muzzi on August 23, 2022.
The FBI is conducting the investigation with the help of the Connecticut Department of Banking, Securities Division.
Avery stressed that an indictment is not evidence of guilt. S
he thanked Interpol and Panamanian authorities for their help in apprehending Muzzi as well as the U.S. Department of Justice’s Office of International Affairs for coordinating the extradition.