Naugatuck Man Accused Of Operating Investment Fraud Scheme Sentenced To Prison: Feds

NAUGATUCK, CT — A Naugatuck man accused of operating an investment fraud scheme was sentenced Thursday to 18 months in prison, U.S. Attorney for the District of Connecticut David Sullivan announced in a news release.

According to court documents and statements made in court, in 2017 and 2018, Rafael Muzzi, 28, a citizen of Brazil residing in Naugatuck, induced 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 investors he had developed.

At times, Muzzi used two entities he formed, Solace Investments LLC and Asseno LLC, according to Sullivan.

Muzzi represented to investors 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, Sullivan said.

According to Sullivan, 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."

Muzzi stole a total of $579,925.28 from 21 investors through this scheme, according to Sullivan.

Muzzi also sent investors fabricated monthly account statements that falsely overstated their return on investment and their account balances, Sullivan said.

These misrepresentations induced some investors to provide him with additional investment funds, according to Sullivan.

In response to investor complaints, the state 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 [investors] and fined Muzzi $300,000," Sullivan said in a news release.

Muzzi then traveled to Brazil in September 2020 but did not return, Sullivan said.

On Aug. 23, 2022, a federal grand jury in New Haven returned an indictment charging Muzzi with fraud and money laundering offenses, according to Sullivan.

Muzzi was arrested on April 1, 2023, in Panama and waived his right to contest his extradition to the U.S., Sullivan said.

Muzzi pleaded guilty to wire fraud on July 30, 2024. He was also ordered to pay full restitution, Sullivan said.

Muzzi is currently released on a $150,000 bond and is required to report to prison in February, according to Sullivan.