The U.S. Securities and Exchange Commission (SEC) is putting a stop to what it claims is a $30 million cryptocurrency scam involving fraudulent diamond investments.
The SEC accused Jose Angel Aman of operating a South Florida-based crypto business called Argyle Coin as a Ponzi scheme, using investments from new recruits to pay for previous investors’ returns.
Aman has reportedly victimized over 300 investors since May 2014. His crypto scam allegedly sprouted from a similar Ponzi scheme he ran using his two other firms: National Diamonds Investment Co. and Eagle Financial Diamond Group, Inc.
The SEC claims Aman “falsely promised” National Diamonds and Eagle Financial investors that the two companies would invest in whole diamonds and then cut and sell them for substantial profits. Harold Siegel and Jonathan H. Siegel were named by the SEC as Aman’s accomplices.
“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,” said the SEC in a press release.
A web of fraudulent companies
Under Aman’s Ponzi scheme, over $10 million worth of “misused or misappropriated” investor money were supposedly used to pay earlier investors their returns. The SEC claims further that Aman used part of the investments he received on personal expenses, including buying horses and paying for his son’s riding lessons.
“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,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.
“The SEC’s diligent investigative work uncovered the Ponzi schemes and our goal is to bring justice to the harmed investors.” The SEC is now seeking “disgorgement of allegedly ill-gotten gains and prejudgment interest.”
Natural Diamonds, Eagle Financial, Argyle Coin, Aman, Harold Seigel, and Jonathan H. Seigel are all facing charges over securities registration violations. Natural Diamonds, Eagle, Argyle Coin, and Aman are also being charged with securities fraud.
The SEC’s request for a temporary restraining order has been approved by Judge Robin L. Rosenberg of the U.S. District Court for the Southern District of Florida. Assets controlled by Aman and his three companies have been temporarily been frozen as well.