Probe widens into L.A. deputies allegedly linked to crypto 'godfather'

A man walking outside a building that bears a federal seal and the words "United States Courthouse"

Nov. 16, 2024 3 AM PT

Federal authorities accuse Adam Iza, a cryptocurrency entrepreneur, of financial conspiracies and extortion.
Prosecutors allege Iza used L.A. County sheriff’s deputies to carry out his criminal bidding.
Iza has pleaded not guilty. A judge ordered him jailed despite claims that he needs medical care after a cosmetic leg-lengthening procedure.

Adam Iza grew up a world away from the Bel-Air mansion he inhabited before his arrest in September.

As his lawyer Josef Sadat tells it, Iza was poor during his childhood in Iraq, borrowing a computer from his uncle before coming to the U.S. as a teenager and building a lucrative cryptocurrency trading platform.

But as Iza grew rich, Sadat said, he attracted “the worst type of blood-sucking characters that Southern California has to offer.”

According to federal prosecutors, that includes multiple Los Angeles County sheriff’s deputies, who were allegedly hired to carry out Iza’s criminal bidding.

At least six deputies have been relieved of duty in connection with the case, according to court filings and Sheriff’s Department sources — three more than previously reported. The sources requested anonymity to discuss the ongoing investigation.

The case first came to light two months ago, when federal authorities arrested Iza, 24, calling him “the godfather” and accusing him of financial crimes and extortion.

Indicted in October, Iza pleaded not guilty earlier this month and returned to court on Wednesday. A judge decided Iza should remain behind bars as he awaits trial despite arguments by his attorney that medical complications from a cosmetic leg-lengthening procedure could cause him to die.

Federal authorities said in September that three unnamed deputies were involved in extortion schemes with Iza, and the sprawling probe has since continued to grow. In October, the indictment implicated a fourth deputy. Two sources said last month that sheriff’s officials appeared to be taking interest, reviewing time sheets from certain units and asking pointed questions about outside employment.

By late October, the Sheriff’s Department confirmed that “several” more deputies had been relieved of duty. Officials refused to name them or say how many there were, though three sources told The Times that at least three more lawmen had been sidelined, which would bring the total to six, with several more said to be under scrutiny.

None appear to have been criminally charged, and it is not clear whether any have retained attorneys.

Ciaran McEvoy, a spokesperson for the U.S. attorney’s office in Los Angeles, declined to comment on whether anyone else had been charged in connection with the case.

Laura Eimiller, a spokeswoman for the FBI, said she was “unable to comment on the investigation other than to say it’s continuing.”

By the time Iza was a teenager, his family had left the Middle East and landed in Missouri.

His lawyer, Sadat, said that after Iza came to Los Angeles, he developed a “new type of software that served as a neural network for helping trade/predict the crypto market.”

Federal court records trace Iza’s alleged crimes back to 2021, when prosecutors say he began paying Los Angeles County sheriff’s deputies to be his hired muscle and help him steal from his enemies.

One of the lawmen — identified as Deputy 1 in court records — ran a private security company that Iza allegedly paid more than $100,000 per month to provide “teams of active LASD deputies” to accompany him around the clock.

During a party at Iza’s home in Bel-Air in August 2021, his bodyguards — at least one of whom was in law enforcement — held the event’s hired planner at gunpoint, according to court filings. Iza allegedly took the man’s phone and used it to transfer money to himself because he was unhappy with the festivities.

Iza is accused of keeping pictures of the party planner’s credit cards and enough other personal information to continue taking money, eventually depleting the man’s accounts of “tens of thousands of dollars.”

A few weeks after the incident, according to Iza’s indictment, Deputy 1 contacted a narcotics detective and told him a confidential informant claimed the party planner had large amounts of fentanyl and cocaine at his house. Sheriff’s deputies later raided the home — but found no drugs.

Charging documents, which identify the event planner only by the initials R.C., say the plot against him grew to include his romantic partner. Prosecutors did not name or charge the woman, but allege she was secretly in contact with Iza and used money he gave her to buy drugs, which were later found in R.C.’s car.

After R.C. returned from a trip out of town, prosecutors say a sheriff’s deputy — identified in court records as Deputy 4 — pulled the car over as R.C. and the woman were driving in Paramount on Sept. 27, 2021.

During the stop, the woman allegedly told Deputy 4 that R.C. had put drugs under the passenger seat of the car. Deputy 4 searched and found what appeared to be cocaine and psilocybin mushrooms.

R.C. spent a few days in jail before the case was tossed out due to a lack of evidence.

Throughout the traffic stop, the event planner’s romantic partner was allegedly communicating with Iza. The indictment alleges she gave the deputy a fake name, birth date and phone number, but she was not arrested or cited.

Prosecutors say R.C. messaged Iza at one point and alleged that he’d been set up.

“The cops had you on their watch list for week, so go complain to them [about] setting you up. Hahaha. Worthless loser,” Iza replied, according to the indictment.

Just before Thanksgiving 2021, Iza hired a private investigator to help him surveil a business associate identified in court records as “E.Z.” The Times was able to identify him as Enzo Zelocchi, a self-described “actor, producer and innovator.”

According to court filings, Iza claimed that Zelocchi had stolen a laptop believed to hold millions of dollars in cryptocurrency. But in an interview this week, Zelocchi said the laptop belonged to him.

On Nov. 21, 2021 the two had a meeting. According to Zelocchi, he hoped to get back money that Iza owed him. At one point, Zelocchi was driving his car with Iza in the back seat when Iza asked to stop at a gas station in Riverside County for food, according to court records.

While they were standing outside the car, an SUV pulled up and two of Iza’s bodyguards — identified in an incident report as former L.A. sheriff’s Deputy Ray Dudgeon and former custody assistant Bryan Rawlings — hopped out. According to the federal indictment, one of the men approached with a gun in hand.

Zelocchi said the bodyguards roughed him up and tried to carry him into the SUV. He told The Times he “was able to break off and escape inside the gas station.” He says he told investigators he thought Iza was trying to have him kidnapped.

Dudgeon could not be reached for comment. A person who answered a phone number associated with Rawlings did not offer comment. Neither of the bodyguards appears to have been charged in connection with the case.

When a responding Riverside County sheriff’s deputy interviewed Iza, he said that he was the one who feared being kidnapped and that he had texted his bodyguards for help.

After Zelocchi fled, Iza and his bodyguards took two bags from the trunk of Zelocchi’s car and left, according to the indictment.

For the next four months, prosecutors say Deputy 1 and another member of the L.A. Sheriff’s Department — identified as Deputy 3 — repeatedly searched confidential law enforcement databases to get personal information about Zelocchi, his associates and their families.

“They were starting to attack everyone in my life,” Zelocchi said. “I was literally in L.A. hiding.”

Then in January 2022, court records say, Deputy 1 got a judge to approve a warrant for GPS location information needed to track several cellphones — including one that belonged to Zelocchi. According to a criminal complaint, the deputy falsely stated that Zelocchi’s number was tied to a suspect in a firearms investigation.

Zelocchi referred to the sheriff’s deputies involved as “corrupt.” Although some deputies have been relieved of duty, he said he hasn’t seen that any of them are in custody.

Those involved, including the deputies, “tried to destroy me, physically, mentally, my reputation,” Zelocchi said, adding that he was forced to relocate to Europe as a result of the harassment.

“You don’t understand how much I suffered,” he said. “It’s been a nightmare.”

Aside from extortion, federal court records accuse Iza of hiding millions of dollars from tax collectors by failing to report income and funneling money through shell companies with co-conspirators. Some of that money allegedly went toward around $64,000 for the surgery to extend the length of his legs.

This week’s status conference centered around followup surgery. When Iza appeared in front of U.S. Magistrate Judge A. Joel Richlin, he had one hand cuffed in front of him while the other gripped a cane.

Iza’s lawyer, Sadat, told the judge that his client had received leg-lengthening surgery in November 2022, which involved breaking his legs and was “very traumatic.”

“It’s a very intense procedure that a lot of doctors won’t even perform ethically,” Sadat said.

Iza was supposed to have surgery to remove the leg-lengthening rods within a year of the first operation, Sadat said, but had delayed scheduling it, and was arrested in September with the rods still in his legs. Sadat said his client was now dealing with painful boils.

Sadat told the court that Iza’s Nevada-based doctor was the “premier, No. 1 leg-lengthening surgeon in the world,” and submitted a letter from the physician that said the rods needed to be removed.

According to Sadat, Dr. Kevin Debiparshad said that if the procedure was not done immediately, Iza could suffer severe damage to tissues, muscles and nerves in his legs.

Cosmetic leg-lengthening surgeries, reportedly gaining in popularity, can add anywhere from 2 to 6 inches to a person’s height. Sadat said that few doctors perform the procedure, and that Debiparshad would be the one to fix Iza’s situation.

“We’re dealing with a 24-year-old kid who has a ticking time bomb in his leg,” Sadat told the judge.

Asst. U.S. Atty. Daniel J. O’Brien said he’d been in discussions with the Bureau of Prisons and the U.S. Marshals Service regarding arranging the surgery in Nevada.

Richlin questioned why Iza had not been examined by a specialist to determine what was medically necessary.

“I do think we’re missing a physician with sufficient expertise providing some sort of consultation of Mr. Iza today and to diagnose his condition,” Richlin said.

Sadat requested that Iza be temporarily released to his parents — who were present in the courtroom — and placed on GPS monitoring so that he could obtain the surgery more quickly.

Richlin denied the request, reiterating that he’d previously found Iza to be a flight risk and saying he “posed a danger to the community.”

After the hearing, Sadat said in a statement that he was “disappointed” with the judge’s decision. He called the surgery “urgent and medically necessary,” and said a doctor had warned that Iza was at risk of death.

“We are racing against the clock,” Sadat said.