Naugatuck Resident Admits Operating Investment Fraud Scheme

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that RAFAEL MUZZI, 27, a citizen of Brazil residing in Naugatuck, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to an offense stemming from an investment fraud scheme.

According to court documents and statements made in court, in 2017 and 2018, Muzzi, at times using two entities he formed, Solace Investments LLC and Asseno LLC, induced victim-investors to provide him funds based on the representation he would use the funds for trading currencies in foreign exchange markets using a trading software program that he told his victims he had developed. Muzzi represented to victims that his software program had a feature that would cause trading to cease in the event of a certain loss in value, thus minimizing downside risk. 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. Through this scheme, Muzzi defrauded at least 10 victim-investors out of what the government alleges totaled more than $550,000.

Muzzi sent victims fabricated monthly account statements that falsely overstated their return on investment and their account balances. These misrepresentations induced some victim-investors to provide him with additional investment funds. Muzzi also provided victims with purported tax documents reflecting fictitious investment profits, causing victims to report and pay taxes on profits that they had not realized.

In response to victim complaints, the State of Connecticut's Department of Banking investigated Muzzi's conduct, issued orders finding that Muzzi and Solace Investments had violated state securities laws, ordered them to make restitution to victims, and fined Muzzi $300,000. On September 6, 2020, Muzzi traveled to Brazil and did not return.

On August 23, 2022, a federal grand jury in New Haven returned an indictment charging Muzzi with fraud and money laundering offenses. Muzzi was arrested on April 1, 2023, in Panama, and subsequently waived his right to contest his extradition to the U.S.

Muzzi pleaded guilty to wire fraud, an offense that carries a maximum term of imprisonment of 20 years. Judge Underhill scheduled sentencing for October 22. Muzzi is released on a $150,000 pending sentencing.

This investigation has been conducted by the Federal Bureau of Investigation with the assistance of the Connecticut Department of Banking, Securities Division.

U.S. Attorney Avery thanked Interpol and Panamanian authorities for their assistance in apprehending this defendant, and the U.S. Department of Justice's Office of International Affairs for coordinating the extradition proceedings in this matter.

The case is being prosecuted by Assistant U.S. Attorneys Conor M. Reardon and Michael S. McGarry.