Federal prosecutors have charged two former executives of Mozaic Payment System, Inc., Marcus Cobb and Rachel Knepp, with conspiracy to commit wire fraud in connection with an alleged scheme to defraud a Boston-based private equity firm out of $20 million.
According to the U.S. Attorney’s Office for the District of Massachusetts, Cobb, 48, and Knepp, 39, both from Nashville, Tennessee, misrepresented the financial status of their company while seeking investment. Prosecutors allege that Mozaic Payment System claimed to operate an application processing royalty payments for performers and music industry clients. However, authorities state that the application did not function and produced no revenue.
In late spring 2023, Cobb and Knepp reportedly approached a Boston private equity firm for funding. During the due diligence process, they are accused of providing fabricated bank statements and financial records showing fictitious growth in revenue and cash reserves. Based on these representations, the investment firm provided $20 million in September 2023.
Prosecutors further allege that after securing the funds, Cobb and Knepp continued to submit false financial documents indicating increasing revenues while Mozaic was actually depleting its cash reserves. The alleged fraud was uncovered by February 2025 when the investor realized the discrepancies and Mozaic collapsed.
Cobb was indicted by a federal grand jury in Boston on November 20, 2025. He was arrested in Chicago on December 8 and is scheduled to appear in federal court in Boston on January 8, 2026. Knepp had previously been charged by Information and pleaded guilty on November 19; her sentencing is set for February 19, 2026.
The charge carries a maximum sentence of up to twenty years in prison as well as supervised release and monetary penalties determined according to federal guidelines.
“United States Attorney Leah B. Foley and Ted E. Docks, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today,” according to officials. “Assistant U.S. Attorneys Kriss Basil and Elianna Nuzum of the Securities, Financial & Cyber Fraud Unit are prosecuting the case.”
“The details contained in the charging documents are allegations,” authorities stated. “The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.”