Nabbed! SEC Reels in $30 Million Alleged Diamond-Backed Crypto Scam

CCN: The U.S. SEC has secured a court order to stop an alleged diamond-backed Ponzi scheme estimated to be worth around $30 million. The securities regulator outlined how more than 300 investors were fleeced into handing over funds to Florida-based Argyle Coin LLC.

SEC obtains emergency order halting alleged diamond-related ICO scheme targeting hundreds of investors https://t.co/sJIb2vCKsZ

— SEC_News (@SEC_News) May 21, 2019

Jose Angel Aman is the mastermind behind the scheme. The SEC alleges that 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.”

Horses, Rent, and Personal Expenses

The diamond-backed Ponzi scheme is no different from any other scam and ultimately saw Mr. Aman simply tell an elaborate tale involving cryptocurrency. In stereotypical style, he used all new investor funds to pay previous suckers investors their “returns.”

“..according to the complaint, 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 report provided no details on how Argyle Coin actually planned to develop its cryptocurrency business. The Argyle Coin website has since been removed. This contributor, however, was able to capture a screenshot of the ICO scam site using an internet archive:

Argyle Coin. Diamond-backed ponzi

Argyle Coin claimed to back crypto with “fancy-colored diamonds” before regulators shut it down. | Source: Web.Archive.org

SEC Cracks Down on ICOs

The past influx of ICO’s, particularly after the 2017 frenzy, is still keeping the SEC busy. The agency’s Cyber Task Force has been overseeing ICO’s and blockchain tech since the altcoin bubble two years ago.

U.S. District Court judge Robin Rosenberg for southern Florida has granted the SEC a request to temporarily freeze Aman and Argyle Coin’s assets. The SEC has charged Aman, his companies, and two co-accused for securities registration violations and securities fraud. In terms of reparations:

“The SEC’s complaint seeks disgorgement of allegedly ill-gotten gains and prejudgment interest.”

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.