The U.S. Department of Justice has charged a Washington D.C. resident for allegedly operating a $25 million digital currency pyramid scheme. The man raised funds from investors by promising them a diamond-backed token.
In its press release, the DoJ revealed that it was charging Jose Angel Aman with wire fraud for operating a fraudulent diamond investment scheme. The 51-year-old solicited investment for diamond contracts from American and Canadian investors. He claimed he would purchase rough colored diamonds, cut and polish them, and then resell them at a profit. He told the investors that their money was secured by his vast inventory of diamonds.
However, all that Aman did was use new investors’ money to pay earlier ones, concealing the fraud.
Just when his scam was about to collapse, Aman allegedly set up Argyle Coin, LLC. The firm would purportedly develop a digital currency backed by diamonds. He then went on a fundraising campaign, promising very high returns and no risk.
The DoJ alleges that he only used a small fraction of the funds to develop the Argyle Coin, with the rest going towards paying off some of the investors and his personal expenses.
“During the course of the Ponzi scheme, Aman and his partners collected over $25 million from hundreds of investors,” the DoJ complaint alleges.
Aman has been sued in the past over his fraudulent token. In July 2019, a group of Venezuelans filed a lawsuit against him and his co-conspirators, Jonathan Seigel and Harold Seigel. The two reportedly control diamond mining companies.
The Venezuelans claimed to have moved to the U.S. to start a new life and invested their money with the alleged fraudsters.
Just a month prior, the SEC obtained a court order to prevent the company from continuing to solicit investments from U.S. citizens. The order allowed the regulator to freeze Aman’s assets as well as those connected to the company. The SEC claimed that Argyle Coin had defrauded over 300 investors.
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