SEC obtained a court order to halt an ongoing $300 million Ponzi scheme
The U.S. Securities and Exchange Commission has recently announced that it has secured a court order from U.S. District Court for the Southern District of Florida to halt an ongoing diamond-backed Ponzi scheme which has targeted more than 300 investors in the U.S. and Canada and estimated to be worth around $300 million. South Florida-based Jose Angel Aman is reportedly the mastermind behind the cryptocurrency scheme and claimed to allegedly used his company Argyle Coin, LLC, and two other companies. According to the complaint filed, the SEC told about two of his other companies – Natural Diamonds Investment Co and Eagle financial Diamond Group Inc – are also part of the scam, stating:
“According to the complaint, in October 2017, Aman and Jonathan H. Seigel continued the scheme by luring investors to invest in Argyle Coin, falsely claiming the investment was risk-free because it was backed by fancy colored diamonds, and promising to use investor funds to develop the cryptocurrency business.”
The diamond-backed Ponzi scheme is no different from any other scams. As the SEC claims, Aman operated Argyle Coin as a Ponzi scheme through which he used all new investor funds to pay previous investors their “returns.” As alleged by the SEC, Aman, who owns Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc (Eagle), had been engaged in unregistered offerings of securities of both of these companies in early 2014. According to the complaint, in October 2017, Aman and his partner in crime Jonathan H. Seigel had continued the scheme by luring the investors promising them handsome and risk-free returns on their investments. They promised the early investors that their investment would be backed by fancy color diamonds and promised to use investor funds to develop the cryptocurrency business. Instead, he used all the capital to pay the early investors the returns he promised and for his personal expenses, including rent on his home, purchases of horses, and riding lessons for his son.
Eric I. Bustillo, Director of the SEC’s Miami Regional Office said:
“As alleged, Aman operated a complicated web of fraudulent companies in an effort to continually loot retail investors and perpetuate the Ponzi schemes as well as divert money to himself. The SEC’s diligent investigative work uncovered the Ponzi schemes and our goal is to bring justice to the harmed investors.”
The SEC charges all three companies and their operator Aman and Harold Seigel and Jonathan H. Seigel with violations of the securities registration provisions and violations of the antifraud provisions of the federal securities laws.