Former Conn. resident charged with stealing $550,000 in investment scheme

Rafael Muzzi, 27, of Brazil, has been charged with 12 counts of wire fraud and two counts of money laundering in connection with the scheme, according to the U.S. Attorney's Office for the District of Connecticut.

Prosecutors allege that between 2017 and 2018 Muzzi induced victim-investors to provide him funds to trade currencies in foreign exchange markets with a trading software he claimed to have developed. But instead of investing the funds, Muzzi diverted a substantial portion of the money for his personal use and to pay other individuals who had invested with him.

Additionally, the indictment alleges Muzzi sent victims fabricated monthly account statements that falsely overstated their investment returns and account balances, which prompted some investors to provide more funds. Muzzi also provided victims with fake tax documents, causing victims to report and pay taxes on profit that did not earn.

Victim complaints later prompted the state Department of Banking to investigate Muzzi's conduct. The agency ultimately determined that he had violated state securities laws, ordered him to make restitution to victims and fined him $300,000. But in September of 2020, Muzzi traveled to Brazil and did not return.

In August last year, a federal grand jury in New Haven returned the 14-count indictment against Muzzi. Officials arrested Muzzi on April 1 while he was in Panama. Muzzi subsequently waived his right to contest his extradition and appeared in court late last month. He has pleaded not guilty to the charges.

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