Crypto ‘Godfather’ Used LA Cops for Extortion, FBI Allege

Federal prosecutors call him “The Godfather,” and like the fictional mob boss, he is said to have had agents on his payroll to carry out his criminal orders.

Adam Iza, who operated a cryptocurrency trading platform known as Zort, allegedly paid several LA County sheriff’s deputies — sometimes tens of thousands of dollars — to conduct unlawful searches and arrests as part of an extortion scheme, according to a federal criminal complaint was released this week. .

Iza hid millions of dollars from tax collectors by failing to report income and funneling money through shell companies with co-conspirators, the complaint said. He is said to have spent the money on numerous luxury vehicles, including a Lamborghini Aventador and a Rolls Royce Phantom, nearly a million on rent for a Bel Air mansion and approximately $64,000 on cosmetic surgery to extend the length of his legs.

Iza is accused of conspiring against rights and tax evasion. Authorities arrested him on September 23, according to federal court documents. Records show he is scheduled to appear in court on October 8.

“Things are not what they appear to be,” said Josef Sadat, an attorney representing Iza in the federal case. “The truth will hopefully come to light soon.”

Iza boasted that she paid active duty law enforcement officers $280,000 a month, according to the complaint.

The U.S. attorney’s office declined to comment on whether the deputies — who are not named in the complaint — will be charged.

Several deputies, including a department detective infamous anti-gang unit, were recently relieved from duty in connection with a federal investigation, authorities said earlier this week. The Sheriff’s Department confirmed the action was related to an investigation “involving the U.S. Attorney’s Office.”

“These blatant allegations contradict the values ​​and mission of our department,” the agency said in a statement Thursday. “Individuals who use their badge as a license to abuse their power to personally benefit from illegal misconduct have no place in law enforcement and must be held accountable.”

The department said it is fully cooperating with the investigation, adding: “Once we have full details of this case, we will review actions internally to ensure this behavior does not occur again.”

Tom Yu, an attorney representing one of the three current officers named in the complaint, told The Times that his client had not been arrested and emphasized that he was only currently under investigation.

“I don’t think he did anything criminal,” Yu said.

A cryptocurrency battle

A few days before Thanksgiving 2021, the complaint alleges, Iza was involved in a kidnapping and robbery attempt in Riverside County that caught the attention of the FBI.

The intended target, federal investigators say, was a business associate of Iza, identified only as “EZ.”

The two men had known each other for about two years, the complaint said, and had recently discussed a business deal involving a medical services platform and cryptocurrency.

According to a Riverside County Sheriff Department report reviewed by the FBI, on November 21, 2021, EZ was driving his car with Iza in the backseat when Iza asked to stop at a gas station to eat.

Then, according to the complaint, as the two men stood at the back of the car with the trunk open, an SUV pulled up and two men got out, whom authorities later identified as a former LA sheriff’s deputy and a former custody assistant . One of the men reportedly came with a gun in hand and told EZ to “get in the car.”

Instead, EZ turned and fled, then called 911. He later told investigators he believed Iza was trying to have him kidnapped to gain access to the digital assets stored on his phone.

A responding Riverside County sheriff’s deputy interviewed Iza, who claimed he was the one who feared being kidnapped.

Iza told the deputy EZ had promised to give him $300,000 for cryptocurrency, but that while driving, Iza became concerned about where they were really going and texted his bodyguards for help.

When the Riverside County deputy spoke to the men in the SUV, they offered a similar story. One — the former LA County deputy who handled the gun during the incident — said he owned a security company and had worked for Iza for about two weeks. He told investigators he had to pick Iza up at a restaurant after a business meeting when he received a text message from Iza saying, “Follow me.”

When the former deputy arrived at the gas station, he pulled out his gun because he feared EZ might be armed, the complaint said. Instead, EZ was found to be carrying an electric screwdriver, according to the complaint.

Riverside County authorities determined the information was not complete enough to make an arrest, although EZ continued to feel threatened in subsequent weeks, according to the complaint.

On December 2, 2021, EZ allegedly received some threatening text messages from an unknown number with photos of his personal information in a law enforcement database. Next to it was part of a Los Angeles County Sheriff’s Department business card.

About two weeks later, according to a letter to law enforcement from EZ’s attorney referenced in the complaint, Iza and his bodyguards showed up at the home of one of his associates looking for EZ. That visit came shortly after EZ received another threatening text message – from a phone number Iza had used – demanding he hand over his laptop containing cryptocurrency.

It is not clear from the complaint whether EZ handed over the laptop, but he is said to have “suffered, among other things, harassment from Iza and his employees.” At one point he received text messages with photos of his family members and the words: “Everyone you know.”

As the FBI dug into the case, the complaint states, authorities began interviewing people in Iza’s circle. That included a private investigator identified in the complaint as “KC,” whom The Times was able to identify from related civil lawsuits as Kenneth Childs.

According to the indictment, Iza hired Childs in November 2021 to find EZ and keep an eye on him. EZ reportedly had a laptop that Iza claimed he stole.

While Childs was working the case, Iza allegedly sent him photos of sensitive law enforcement data, including images of a computer screen with DMV licensing information and photos of a search warrant for EZ’s phone. According to the complaint, Iza sometimes boasted that he had paid law enforcement officers to give him the information.

‘How did you find him? Has this location appeared in any databases?’ Childs wrote in one text, according to the complaint.

“We pinged his phone,” Iza replied.

A few texts later, he added: “The ping was done by the law enforcement officers themselves… It required a warrant… And had to be signed by the judge.”

In January 2022, federal prosecutors said, a current Los Angeles County sheriff’s deputy — identified as Deputy 1 in the complaint — obtained a warrant for GPS location information on several phones, including one used by EZ.

The affidavit used to justify the warrant described a gun case that did not involve or mention EZ

“It appears that LASD Deputy 1 added Victim EZ’s phone number to a list of phone numbers associated with the firearms investigation and falsely stated that Victim EZ’s phone number had been used by the firearm suspect,” FBI Special Agent in Charge wrote Barbara Johnson in the complaint. “This affidavit resulted in a warrant for GPS tracking information identifying the residence of victim EZ.”

After the warrant was approved, prosecutors allege, Deputy 1 sent Iza screenshots to prove it.

“Damn, my husband actually filed the warrant,” Iza wrote in a text message. “That’s serious business for someone… and risks a 24-year career.”

Prosecutors allege that Iza called a meeting sometime in early 2022 to plan the heist of EZ’s laptop. Childs was present, as was Iza, another LA County deputy — identified in court filings as Deputy 2 — and the deputy’s brother.

Childs told federal investigators that he remained in his car while the robbery took place. He claimed the deputy’s brother grabbed the EZ employee.

The complaint says Iza made payments to Childs for the job, then fired him and recovered the money. That same year, in 2022, Childs filed a civil lawsuit against Iza’s company in connection with the non-payment. That case is still ongoing.

“I’ve been litigating this story for two years now,” said James Whitemyer, an attorney representing Childs and his company. “I was hoping the case would be settled.”

A party planner

Even before Iza and EZ’s relationship turned sour, prosecutors say, the crypto mogul had spent several months harassing another target, an event planner identified as RC.

Prosecutors say RC received an email from Zort in the summer of 2021 asking for help planning a party for Iza’s 21st birthday.

In exchange for $50,000, RC hosted a bash at Iza’s home in Bel Air in August 2021. But during the event, RC was escorted to Iza’s office, where Iza told him he was unhappy with the party and wanted half of the costs reimbursed, according to the complaint.

He reportedly demanded RC’s phone, but RC refused until Iza’s bodyguards drew their weapons. After forcing RC to reveal the passcode, Iza allegedly transferred $25,000 to herself.

Before letting RC leave, Iza took photos of his driver’s license, passport and credit cards, according to the complaint. In the days that followed, Iza allegedly made several money transfers from RC’s accounts.

The following month, RC was driving in Lakewood with a woman he was seeing when a sheriff’s deputy pulled him over to arrest him on a warrant. The deputy searched the car and found drugs that RC said he didn’t know were there. At some point during the arrest, RC saw Iza driving to the scene in a black SUV, talking to the deputy, looking at RC and driving away.

RC spent three days in jail and the charges were later dropped due to lack of sufficient evidence, the complaint said.

Afterwards, RC allegedly received taunting text messages from a number linked to Iza, showing photos of the arrest and telling him he had been “hanging out with the wrong people.”

A few weeks later, officers raided RC’s home but found no drugs.

Months later, when the FBI tracked down a copy of the paperwork used to justify the search, investigators discovered that Deputy 1 had based it on information from an unnamed confidential informant.

The complaint accuses Iza of other cryptocurrency extortion schemes, including one in which he allegedly posed as an FBI agent and stole a laptop containing cryptocurrency. In total, investigators estimate that Iza and his then-girlfriend – identified only as “Co-conspirator 1” – raked in more than $30 million between 2020 and 2022.

The FBI said it learned that Iza planned to travel from Los Angeles to Zurich on Monday. They arrested him the same day.