US SEC Shuts Down Diamond-Related Crypto Ponzi Scheme

Crime, News | May 23, 2019 By:

The US Securities and Exchange Commission (SEC) has halted an ongoing $30 million crypto Ponzi scheme targeting more than 300 investors in the US and Canada.

The agency said Judge Robin L. Rosenberg of the US District Court for the Southern District of Florida granted the SEC’s request for a temporary restraining order and temporary asset freeze against South Florida-based Argyle Coin, a purported crypto business, and its principal Jose Angel Aman, which are charged with using investor funds to run a Ponzi scheme.

According to the SEC’s complaint, Argyle Coin used new investor funds to pay prior investors their purported returns. The Ponzi scheme is reportedly a continuation of a scheme Aman orchestrated with two other companies he owns, Natural Diamonds and Eagle Financial Diamond Group Inc (Eagle). As alleged, Aman engaged in unregistered offerings of securities in Natural Diamonds and Eagle as early as May 2014, falsely promising investors that the companies would invest in whole diamonds to cut down and sell for huge profits.

In October 2017, Aman, Harold Seigel 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.

“Aman, Natural Diamonds, Eagle, and Argyle Coin, misused or misappropriated more than $10 million of investor funds to pay other investors their purported returns and for Aman’s personal expenses, including rent on his home, purchases of horses, and riding lessons for his son,” the complaint said.

The agency is seeking disgorgement of allegedly ill-gotten gains and prejudgment interest from Natural Diamonds, Eagle, Argyle Coin, Aman, Harold Seigel, and the relief defendants, and financial penalties against Natural Diamonds, Eagle, Argyle Coin, Aman, Harold Seigel and Jonathan H. Seigel.

“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.”